Sensex Drops 1.4% in India; RIL Falls 4.3%

123jump.com Staff
22 Jun, 2009
New York City

Stocks in Mumbai trading opened higher on the expectations of higher 3G license revenues to the government but deteriorated in the afternoon. The Worlds Bank forecasts global economy to contract 2.9% in 2009 from previous decline of 1.7% in March.

[R]7:00 PM Mumbai, 9:30 AM New York – Stocks in Mumbai trading opened higher on the expectations of higher 3G license revenues to the government but deteriorated in the afternoon. The Worlds Bank forecasts global economy to contract 2.9% in 2009 from previous decline of 1.7% in March.[/R]

Indian stocks dropped 1.4% in highly volatile trading after the World Bank estimated that the global economic will shrink at 2.9% compared to 1.7% predicted in March 2009.

At the opening, stocks had advanced on the expectations that government will earn a minimum 36,860 crore rupees after doubling its base price for the auction of third-generation spectrum to 4,040 crore rupees.

However, the market was unnerved by the revived south-west monsoon that had been stalled since June 7, 2009, which will likely cover Maharashtra, Karnataka and Andhra Pradesh.

Energy, metal and IT stocks fell.

Finance Minister Pranab Mukherjee will present the budget on July 6, while the Railway Budget will be presented on July 3, 2009 and the Economic Survey will be released on July 2, 2009.

In Mumbai, the BSE 30-share Sensex fell 1.4% or 195.67 to 14,326.22, and the CNX Nifty shed 1.8% or 78.35 to 4,235.25.

Of the stocks traded on the BSE, 1,112 increased, 1,498 fell, and 70 were unchanged.

Daily turnover on the BSE declined to 5,130 crore rupees compared with 5,959.89 crore rupees on Friday last week.

Fuel Prices will not be Raised

Reuters News reported today that Indian oil minister Murli Deora said there were no immediate plans to increase the price of both petrol and diesel.

Gainers & Losers

Reliance Industries shed 4.3% to 1,952.45 rupees after Financial Times reported citing comments from Deora that the government is exclusive owner of the natural gas from the fields operated by Reliance Industries. The comments suggest that only the government can set the price of natural gas and decide how to distribute the gas.

ONGC fell 1.6% to 993.85 rupees on the expectations India will overhaul the current royalty payment system to boost revenues of the exchequer.

IT stocks fell on uncertainty over new tax regimes that might be announced in the Union Budget. Infosys Technologies fell 0.3% to 1,765 rupees, TCS declined 2.9% to 379.75 rupees and Wipro plunged 0.6% to 378.30 rupees.

Auto stocks dropped on profit taking after a recent rally. Tata Motors dropped as low as 3.4% but recovered to close at 333.60 rupees, Mahindra & Mahindra declined 3.8% to 709.30 rupees, but Maruti Suzuki India rose 1.5% to 1,062 rupees.

State Bank of India plummeted 1.7% to 1,694.75 rupees after its board said it has approved its acquisition of State Bank of Indore.

HDFC Bank fell 1% to 1,540.20 rupees and ICICI Bank rose 1.8% to 726.90 rupees.

Larsen & Toubro rose 1% as advance tax payment rose 15.8% to 110 crore rupees in the first quarter of 2009 from the same period a year earlier.

Bharat Heavy Electricals rose 0.2% after announcing that is received a contract worth 105 crore rupees from refiner Indian Oil Corporation.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 40.01 or 0.41% to 9,826.27, Hang Seng index in Hong Kong increased 138.62 or 0.77% to 18,059.55, CSI 300 index in China higher 2.56 or 0.08% to 3,082.56. ASX 200 index in Australia increased 18.60 or 0.48% to 3,918.20. The KL Composite index in Malaysia closed lower 13.53 or 1.28% to 1,045.97.

The Kospi Index in South Korea increased 16.37 or 1.18% to close at 1,399.71.SET index in Thailand closed lower 6.69 or 1.14% to 582.29 and JSE Index in Indonesia decreased 15.44 or 0.78% to 1,975.03. The Sensex index in India decreased 195.67 or 1.35% to 14,326.22.