Sensex Up, Inflation Above 5%

Elena
08 Sep, 2006
Mumbai

The Sensex advanced for a second straight week in September helped by sustained foreign funds inflow and oil prices plunging to a 5-month low. The sinking price of oil supported auto, refinery and energy stocks. Reliance Communications led the advancers, with Maruti, Hero Honda and Hindalco also gaining. HDFC and ICICI Bank led the decliners. The wholesale price index rose to 5.01%.

[R]10:30AM NY Time Sensex ends the week in positive territory on oil and upbeat Asia[/R]
The Sensex on BSE advanced 64.80 points or 0.6% to close at 11,918.65. The benchmark index traded in a range of 116 points during the day. The market-breadth was strong with the advancers leading the decliers by 50%. On the BSE trading, 1,532 shares advanced, 1,004 declined and 83 stocks remained unchanged. From the Sensex index stocks, 17 advanced and 13 declined. The turnover on BSE was Rs 3,484 crore, higher than Thursday’s Rs 3,312 crore. The turnover on NSE was Rs 7,273.14 crore.

The wholesale price index, for the week ending August 26, 2006 rose to 5.01%. The index climbed above 5% for the first time in eight weeks. Finance Minister P. Chidambaram said to the reporters that he is not ‘alarmed’ by the data. He also said that the government will do whatever it takes to bring down the inflation below 5%.

Reserve Bank of India has said earlier that it expects the wholesale inflation to stay between 5% and 5.50% for the year and expressed that inflation pressure may be sustained as state controlled energy prices in India have not kept up with price hikes in the global markets. India imports 70% of its energy needs.

Reliance Communications led the advancers, surging 5% to Rs 316.50. Maruti Udyog jumped 2.87% to Rs 939.30 on 8.48 lakh shares traded on BSE. Hindalco gained 1.74% to Rs 183.70 and Hero Honda spurted 3.66% to Rs 737. Bharti Airtel advanced 1.64%, to Rs 430, after reports that it added 1.31 million GSM users in August, lifting its customer base to 25.7 million.

Index heavy Reliance Industries gained 0.07%, to Rs 1,126.30 on 13.59 lakh shares. Reliance Industries was the most-active stock on BSE with a turnover of Rs 152.67 crore. Century Textiles with Rs 149.11 crore and Reliance Communications with Rs 102.14 crore came second and third respectively.

Auto stocks advanced supported by a steady decline in global crude oil price. Punjab Tractors gained 6.47% to Rs 250, Kinetic Engineering rose 1.41% to Rs 143.50 and Swaraj Mazda advanced 2.53% to Rs 235.25. Refinery shares also benefited from global crude oil prices, moving to higher ground. HPCL climbed 2% to Rs 304, Chennai Petroleum jumped 4.03% to Rs 227.10, MRPL was up 1.97% to Rs 43.90, and Indian Oil Corporation edged up 1.70% to Rs 515. BPCL gained 3.03%, to Rs 388 after reports that it plans to buy sugarcane fields in Brazil to secure imports of ethanol.

Tyre shares advanced as rubber price plunged to an eight-month low. Apollo Tyres rose 5.76% to Rs 333.10, JK Industries surged 8.87% to Rs 128.90, Goodyear India advanced 5% to Rs 118.65, CEAT also gained 5% to Rs 111.90, and Falcon Tyres moved up 2.26% to Rs 117.55. Hotels stocks gained on renewed buying. EIH Associated soared 6.48% to Rs 819, Royal Orchid Hotels notched up 1.31% to Rs 173.50, Indian Hotels rose 1.20% to Rs 1,318 and Viceroy Hotels added 1.81% to Rs 92.60.

HDFC and ICICI Bank led the decliners. HDFC was down 1.24% to Rs 1,336 and ICICI Bank declined 0.82% to Rs 602.10.

Jet Airways was in focus, with a turnover of Rs 149.11 crore. It witnessed a high degree of volatility today, trading in a wide-range. It ended 6% lower to Rs 625 on 22.58 lakh shares.