Sensex Down, TCS Wins China Business

Ivaylo
13 Feb, 2007
New York City

The market opened lower and soon tumbled below to a low of 13,958. The market recovered at noon on buying in large-caps. Market fell again to rebound just before close with a 100 loss. Bajaj Auto, ONGC and Bharti Airtel led the gainers, while Hindalco and Reliance Comm led the decliners. The government is considering the option of reducing the excise duty in gasoline. TCS wins Chinese government contract to revamp foreign exchange system.

[R]7:30AM NY-6:30PM Mumbai Sensex ends 100 points lower on inflation concerns.[/R]
The Sensex on BSE finished 99.72 points, or 0.70%, lower at 14,090.98. The session was extremely volatile as the market traded within a range of 400 points. The market-breadth was negative, of the 2,605 stocks traded, 1,484 declined, 1,056 advanced and 68 were unchanged. Of the 30 stocks in the Sensex only nine advanced, while the rest 21 declined. The turnover on BSE was Rs 4,875 crore, higher than Rs 3,266 crore on Monday, while on NSE, the turnover was Rs 9,995.7 crore, also higher than Rs 8,908.45 crore on Monday.

Economic news

Petroleum Minister Murli Deora stated on Tuesday that the government is considering a cut in excise duty in gasoline by one rupee to curb the rising inflation. He, however, ruled out any reduction in gasoline and diesel prices till the international prices came down to $50 per barrel. Separately, World Bank expressed confidence that India will be able to control the rising inflation and maintain current growth rate.

Vodafone on Tuesday said its brand new acquisition, Hutch-Essar, would soon become the number one or two mobile operator in India. Hutchinson has agreed in principle to sell its 67% stake in Hutchinson Essar to Vodafone. The regulatory and shareholder approval is expected by the end of the second quarter. Vodafone has paid thirty times operating earnings for its stake, a substantial premium to the market expectations. The company is plans to share its mobile network infrastructure with Bharti Airtel to reduce capital expenditure.

Trading highlights

Akruti Nirman was the most active stock with a turnover of Rs 218 crore followed by Reliance Communications and Global Broadcast.

Advancers

Bajaj Auto, Bharti Airtel and ONGC were leading the gainers in the large-caps.

Bajaj Auto gained 3.5% to Rs 3,046, Bharti Airtel was up 2.3% to Rs 745.65. Bharti Airtel signed an infrastructure sharing agreement with Vodafone, which will allow both operators to share nearly 70,000 mobile towers across the country.

ONGC rose 2.5% to Rs 887.90. ONGC is about to strike the first asset swap deal with Italy’s ENI on Wednesday. ONGC had also initiated talks with Brazilian Petrobras for offering each other a stake in their respective oil & gas blocks.

Reliance Industries gained 1.1% to Rs 1,372 and helped the barometer index to recover in late trading. Ranbaxy advanced 1.8% to Rs 617.70, as it launched a generic form of Lipitor in Denmark and compete with current global market leader Pfizer for cholesterol drug.

[Decliners

Hindalco led the decliners, down 4% to Rs 143, continuing the sharp drop on concerns that it will not profit from the $5.9 billion Novelis purchase.

Engineering & construction large-cap L&T lost 3% to Rs 1,609. Tata Steel gave up 2.5% to Rs 432.55. Infosys shed 1.7% to Rs 2,310 in volatile trading and Reliance Communications slipped over 3% to Rs 441.


[R]6:30AM Europe advances Tuesday on strong gains in auto and airline stocks.[/R]
European markets were higher on Tuesday. By mid morning, Frankfurt Xetra Dax gained 0.4% to 6,882.86, the CAC 40 in Paris added 0.4% to 5,664.97 and London FTSE !00 climbed 0.2% to 6,366.4.

Advancers

Automaker Peugeot shares were up 1.1% and airline Ryanair Holdings shares 2.2% higher in the transport segment as crude for March delivery closed down $2.08 at $57.81 a barrel on the New York Mercantile Exchange on Monday. Norway Renewable Energy Corp gained 4.5% after reporting a better-than-expected 86% jump in Q4 core earnings. French telecoms and construction group Bouygues gained 1.4% after reporting a 10% rise in 2006 revenues, beating expectations, helped by sales growth at its telecoms unit.

Decliners

Sanofi-Aventis, the French drugmaker, fell 1.9% despite beating expectations with its Q4 operating profit and forecasting further growth for 2007. UBS shares lost 0.8% after the banking company reported a 47% drop in Q4 net profit but also said that it would buy back up to 10% of its shares. British Land shares fell 2.1%, Land Securities shares dipped 1.6% and Liberty International shares lost 2.2%.

Oil and gold

Oil slipped below $58 a barrel on Tuesday, extending a $2 drop from the previous day on signs that OPEC will refrain from further oil supply cuts when it meets in March. U.S. crude was off 23 cents at $57.58 a barrel. London Brent crude slipped 12 cents to $56.48 a barrel. Gold traded at $665.90 an ounce on Tuesday, up $1.30 an ounce from its close of $664.60 on Monday.

Currencies

The euro advanced after a report showed German economic growth unexpectedly quickened in Q4, underpinning expectations the European Central Bank will keep raising interest rates. The euro gained to $1.300 in early trade in London from $1.2966 in New York yesterday. It was also at 157.75 yen from 158.13. The yen traded at 121.34 against the dollar from 121.94 late in New York yesterday.