Sensex in India Up 1%; Rupee Weak

Devan Biswas
20 May, 2011
New York City

Stocks in Mumbai gained on the optimistic outlook and ignored the resurgent inflation data. The rupee hovered near 2-month low. Reserve Bank of India discontinued its second liquidity adjustment facility as liquidity improves.

[R]5:00 PM Mumbai – Stocks in Mumbai gained on the optimistic outlook and ignored the resurgent inflation data. The rupee hovered near 2-month low. Reserve Bank of India discontinued its second liquidity adjustment facility as liquidity improves.[/R]

Stocks in Mumbai trading gained for the second day in a row and rupee edged lower and traded near 2-month low. Commodities gained and crude oil price increased.

The Sensex index in Mumbai jumped 1% or 184.69 to 18,326.09 and the Nifty index increased 58.25 or 1.1% to 5,486.35.

The rupee declined 11 paisa to 45.19 against one dollar and crude oil price increased $1.02 to $99.65 a barrel in Singapore trading.

The price of ten grams of gold declined Rs 1,200 to Rs 22,750 and the price of one kilo of silver increased 1.1% to Rs 56,005.

Stocks struggled after food price index rose 7.47% and fuel price index increased 12.11% in the year to May 7. The primary article price index declined to 10.94% increase from the previous week increase of 11.96%.

Stock Movers

ITC declined 1.8% after the cigarette maker reported net profit in the fourth quarter ending in March increased 25% to Rs 1,281.48 crore and declared annual dividend of Rs 2.80 a share. The board also approved Rs 1.65 additional dividend.

Reliance Industries increased 0.7% to Rs 921.40 as the natural gas explorer and diversified conglomerate struggles to increase production. The company is also in negotiations with the U.S. based American Express to provide online payment gateway.

Energy related companies declined for the second day in a row after the government increased the subsidy burden to 38.7% form 33.3%. ONGC declined 1.1%

Oil India fell 0.9% on the estimate that its subsidy burden will increase to Rs 3,293 crore and GAIL India declined 0.3% on its subsidy in the current year to increase to Rs 2,111 core.

Tata Steel increased 2.8% and after the close the company said it will restructure its business in Europe. The company plans to eliminate a part of its plant in Scunthorpe and may cuts as many as 1,500 jobs. The company also plans to invest 400 million pounds over the next five years.

Larsen & Toubro extended gains for the second day with an increase of 3.6% after it reported an increase in order book and positive revenue outlook for the year. The quarterly profit increased 17.2% but declined 9.5% for the year ending in March.