German Exchange Buys 5% in BSE

Ivaylo
14 Feb, 2001
New York City

The market opened with a negative bias and plunged further on RBI

[R]7:30AM NY-6:30PM Mumbai Sensex declines further on RBI hike of CRR.[/R]
The Sensex on BSE finished 81.08 points, or 0.58%, lower at 14,009.90. The market breadth was negative, out of 2,564 stocks traded, 1,491 declined, 1,012 advanced and the rest 61 were unchanged. Of the 30 stocks in the Sensex index, 15 advanced, while the rest declined. The turnover on BSE was Rs 3,998 crore, lower than Rs 4,875 crore on Monday, while on NSE, the turnover was Rs 8,878.7 crore, also lower than Rs 9,995.7 crore on Monday.

Economic news

In an attempt to put inflation under control, the Reserve Bank of India raised, on Tuesday, the cash reserve ratio, popularly known as CRR. This refers to the level of deposit banks have to maintain with the Reserve Bank of India. The Reserve Bank of India hiked it by half a percentage point to 6%. The move will reduce the funds available for lending and may lower profitability of banks. The RBI took this step to curb the fast rising inflation in consumer prices and speculation in real estate prices.

India, the second largest wheat producer in the world, has banned all exports of wheat for the rest of the year 2007. No wheat was exported in 2006 as the country had to import the commodity for the first time in six years following a weak crop.

German bourse Deutsche Borse has acquired a 5% stake in the Bombay Stock Exchange for Rs 189 crore, putting the value of the oldest stock exchange in Asia at around Rs 3,800 crore or $855 million.

Corporate news

Vodafone announced it would invest two billion dollars over the next couple of years to expand Hutch-Essar into rural India, while promising cheaper mobile rates and better services to customers.

Trading highlights

Newly-listed Cinemax India was the most-active stock today with a turnover of Rs 171.20 crore followed by Infosys and Tata Steel.

Advancers

Aluminium large-cap Hindalco, which was the top decliner on Tuesday, led the advancers today, up 3.9% to Rs 147.60. Other gainers included Reliance Communications adding 2.6% to Rs 451.3, Bharti Airtel surging 3.2% to Rs 761 and ACC gaining 1% to Rs 1,021.6. Oil leader ONGC advanced 1.7% to Rs 900 and Tata Steel rose 1.5% to Rs 438.9.

ONGC Videsh Ltd., the overseas branch of India's Oil and Natural Gas Corp. Ltd., announced on Wednesday it had bought a 20% stake in Italian firm Eni’s deepwater block in Congo. In return, ONGC has sold to Eni a 34% stake in its deepwater block in the Mahanadi basin. Index heavy Reliance Industries ended 0.8% higher at Rs 1,377.15 and had a major role in the recovery of the market from the lower level.

Decliners

Banks were the worst hit after the move of RBI on CRR. State-run SBI led the decliners, off 6.1% to Rs 1,101.25, on a volume of 8.31 lakh shares. It has rebounded from a low of Rs 1,085.55. ICICI Bank also shed 4.1% to Rs 915 and HDFC Bank declined 5.2% to Rs 1,016.65.

Auto maker Maruti Udyog lost 3.8% to Rs 857.40, Grasim was down 3.5% to Rs 2,655.85. Bajaj Auto shed 1% to Rs 3,015.16. The company is expecting revenues of Rs 10,000 crore for the current fiscal year with total sales of 28 lakh vehicles. Infosys shed 1.1% to Rs 2,283.95.


[R]6:30AM Europe trades higher on Wednesday on strength in software, services.[/R]
European markets were higher on Wednesday. The benchmark FTSE 100 Index in London increased 11.1, or 0.2%, to 6,392.90 in London in mid-morning trade, breaching the 6,400 level earlier. German Xetra Dax added 25.8 points, or 0.4%, to 6,921.18 and France’s CAC 40 gained 19.8 points, or 0.4%, at 5,702.44.

Advancers

Wolseley Plc surged 4.7% on a report Cinven Ltd. may make a 10 billion-pound, or $19 billion, bid for the company. Commerzbank rose 2.7 % after the second largest commercial lender in Germany reported record net profits for last year and raised its earnings targets for 2007. Adecco added 2.1% after Deutsche bank upgraded the Swiss employment group from hold to buy. Rio Tinto Group, up 2% and Xstrata Plc, 1.7% led gains by mining shares after copper and gold rose. Electrolux AB had the biggest rally in a decade, surging 18%, after the world second-largest household appliances maker returned to a profit. ASML Holding NV led technology stocks higher, up 2.2% as earnings surged at Applied Materials Inc. of the U.S. DaimlerChrysler AG, was up 1.5%, and led a rally by car companies after a newspaper reported it may sell its loss-making U.S. unit Chrysler.

Decliners

DSM fell heavily in early trade, retreating 8.6% after Q4 results from the Dutch chemical group fell short of forecasts. Societe Generale fell 2.3% after Q4 profits also missed market forecasts.

Oil and gold

Crude oil on the New York Mercantile Exchange rose $1.25, or 2.2%, to $59.06 a barrel. March gasoline gained 5.64 cents, or 3.6%, to $1.6091 a gallon. Gold climbed to a six-month high in London as the dollar extended declines against the euro, spurring demand for the precious metal as an alternative asset. Gold for immediate delivery gained $4.10, or 0.6%, to $668.35 an ounce in early trade in London.

Currencies

The euro advanced to the highest in almost six weeks against the dollar after European Central Bank Governing Council member Klaus Liebscher stated that ECB is concerned inflation will accelerate. The euro rose to $1.3097 in early trade in London from $1.3039 late yesterday in New York. Against the yen, it advanced to 158.56 from 157.98. The pound canceled out its decline against the euro and rose against the dollar after Bank of England policy makers announced inflation will fall to the 2% target by Q4 based on market forecasts for a second interest-rate increase this year. Against the euro, the pound was at 66.96 pence in London from 66.97 on Feb. 13, its weakest since Jan. 9. It was at 67.11 pence before the central bank released its quarterly inflation report. The U.K. currency was also at $1.9551 from $1.9525 before the report and $1.9469 late yesterday. Against the dollar, the yen traded at 121.29 in London from 121.16 late yesterday in New York.