India's Auto Sales Drop to 2-year Low; Stubborn Inflation

Devan Biswas
09 Jun, 2011
New York City

Stocks in Mumbai declined ahead of factory output data tomorrow. The latest inflation data showed an increase in food prices and wholesale prices rose 0.5%. Automakers declined after May unit sales rose at the slowest pace in two years.

[R]5:30 PM Mumbai – Stocks in Mumbai declined ahead of factory output data tomorrow. The latest inflation data showed an increase in food prices and wholesale prices rose 0.5%. Automakers declined after May unit sales rose at the slowest pace in two years.[/R]

The benchmark index Sensex in Mumbai trading changed direction more than three times before closing down a fraction. Market focused on the factory data scheduled to be released tomorrow.

Stocks rebounded from the lows of the day after the government deferred its plan to increase retail petrol prices by two more weeks and the latest inflation index showed a little improvement.

The Sensex index declined 9.39 to 18,384.90 and the Nifty index fell 5.80 to 5,521.05.

The rupee closed lower 10 paisa to 45.30 and the price of ten grams of gold was nearly unchanged at Rs 23,470.

The price of one kilo of silver gained 1.2% to Rs 58,000 and crude oil price added 0.7% to Rs 4,804.

The wholesale price index increased 0.5% to 192.7 at the end of week on May 28 from 191.7 for the previous week according to the latest data from the government.

For the year to the week inflation increased to 11.52% compared to 10.87% in the previous period.

The food price index in the week increased to 9% from the previous week increase of 8.55%. For the year to the week, fruit prices increased 31% and milk and cereal prices rose 5%.

Stock Movers

Cox & Kings added 2.2% to Rs 408 after the company set June 22 date for the 2-for-1 split.

ONGC declined 1.7% to Rs 265 after an independent auditor cuts estimate of proven energy reserves by one third to 130 million tons for its international subsidiary ONGC Videsh.

Asian Paints declined 1.9% to Rs 3,146 after the stock turned ex-dividend of Rs 23,50 a share.

Dish TV extended gains in the last one week by 1.4% to Rs 81.20 after it reported better than expected earnings.

Automakers traded lower after May unit sales increased at the slowest pace in the last two years. The sales increased 7% to 158,817 units in the month according to the data released by the Society of Automobile Manufacturers today.

Maruti sales increased 1%, Hyundai Motor sales rose 14% and Tata Motors Ltd sales surged 13%. Toyota Motor sales soared five-fold but Honda Motor sales dropped 43%.

Reliance Infratel attracts interests from several domestic and international companies. Telecom tower operator Viom and Dubai based Etisalat are expected to bid for the stake.