Sensex in India Falls 0.7%; Weak Industrial Production Growth

Devan Biswas
11 Mar, 2011
New York City

Stocks in Mumbai traded lower after industrial production rose less than expected in January. Markets opened lower on weak economic data in U.S. and spread of unrest in the Middle East to Saudi Arabia.

[R]5:00 PM Mumbai – Stocks in Mumbai traded lower after industrial production rose less than expected in January. Markets opened lower on weak economic data in U.S. and spread of unrest in the Middle East to Saudi Arabia.[/R]

Mumbai stocks opened lower after weaker than expected industrial production data and weak trading sentiment in Asia and in overnight trading in the U.S.

Markets were also unnerved after Japan registered massive earthquake of 8.9 in northeastern region that triggered tsunami with waves as high as 10 meters. At least 32 people have been killed and the death toll is expected to rise according to Japanese television broadcaster NHK and police.

Industrial production index in India increased 3.7% in January and in the first ten months the index was up 8.3% compared to a year ago.

Manufacturing index advanced 3.3% and electricity output rose 10.5% in the month.

The Sensex in Mumbai declined 153.89 or 0.7% to 18,174.09 and the Nifty index fell 48.95 to 5,445.45.

Stocks opened lower and managed to rebound in the positive territory but fell sharply tracking the Asian markets losses after the quake news in Japan.

The rupee declined to 45.94 against a dollar and the price of ten grams of gold closed at Rs 21,118.

Stock Movers

Telecom stocks declined after the telecom authority issued cancellation notice to two companies for the failure to launch services. Idea Cellular failed to launch its service in Punjab and Etisalat DB has not launched its service in Delhi and Mumbai according to the license terms.

MTNL declined 3.6% and Bharti Airtel fell 2.2%. Reliance Communications declined 3.6% to Rs 96.15.

Worries of higher rates dragged construction and infrastructure stocks lower. Jaiprakash Associates declined 2.9% and Bharat Heavy Electricals fell 3.5%.

Reliance Industries increased 0.8% to Rs 992 and ONGC gained 2% to Rs 281.

Auto stocks declined on the worries that retail petrol prices will be increased sooner than expected as prices in the international markets hover at 2-year high.

Hero Honda Motors decreased 0.5% and Bajaj Auto declined 2%. Tata Motors increased 0.3% to Rs 1,167.05.

Bank stocks declined for the third day in a row this week ahead of banking rules review next week. ICICI Bank declined 0.6% and HDFC Bank fell 1.1%. State Bank of India declined 0.6%.