Sensex Up, VSNL Up 2%

Ivaylo
19 Feb, 2007
New York City

Banking sector stocks led a broad based rally in the market trading. ICICI Bank led the gainers followed by UTI, SBI and other regional banks. Hero Honda and Gujarat Ambuja led the decliners. The government intends to relax limits on the compulsory reinsurance by general-insurance companies. Tata Group is preparing to launch the largest Indian international bond issue.

[R]8:00AM NY-7:00PM Mumbai Sensex advances Monday on buying in large-caps.[/R]
The Sensex on BSE ended 47.35 points, or 0.33%, higher at 14,402.90. The market-breadth was positive, although, earlier in the session was much stronger. Small and mid-cap stocks rallied. As 1,340 shares advanced, 1,303 declined and 56 stocks remained unchanged. Of the 30 stocks in the Sensex, 16 declined, while the rest advanced. The turnover on BSE was Rs 4,204 crore, compared to Rs 4,266.54 crore on Thursday. On NSE, the turnover was Rs 7,762.21 crore, lower than Rs 10,025.11 crore on Thursday.

Economic and corporate news

The government intends to liberalized limits on the compulsory reinsurance by general-insurance companies. The government hopes that this will reduce operating expenses and insurance premiums. The government wants to bring down slowly the compulsory reinsurance that companies are required to carry out with national reinsurer General Insurance Corporation of India to 10% from the current 15%.

The Tata group preparing to launch the largest Indian junk bond issue in the overseas markets, expected to be between $2.6 billion and $3 billion in size, to repay loans from other banks. Junk bonds are high yield debt instruments used to finance takeover of companies.

Trading highlights

GBN was the most active stock with a turnover of Rs 296 crore followed by Redington and HDFC Bank

Advancers

Private sector ICICI Bank led the advancers, up 3.12% to Rs 978. Maruti Udyog surged 2.56% to Rs 914.70, on a cut in petrol and diesel prices last week. IT large-cap TCS advanced 1.53% to Rs 1,310, on intense buying as the software exporter secured an overseas order last week. Tata Steel was up 1.11% to Rs 447, ITC gained 0.66% to Rs 175, and SBI ended up 0.52% to Rs 1,129.

Index heavy Reliance Industries advanced 0.72% to Rs 1,417. Reliance Industries announced on Thursday, its board will meet on February 24 2007 to review plans to raise $2 billion, and consider possibilities for generating more funds to finance its interests.

Shares of Bharti Airtel surged 2.41% as the group announced that it would invest up to $2.5 billion by 2015 in its retail venture with Wal-Mart. The retail industry in India has seen a sharp rise in investments. Reliance Retail, Bharti, Essar, Pantaloon, Birla, Tata and Goenka groups have announced several large investment plans. The industry has attracted attention from several international discount retailers but the lack of infrastructure and high cost of real estate have been daunting for even the largest companies.

Decliners

Hero Honda led the decliners, off 3.71% to Rs 716. Gujarat Ambuja Cements declined 3% to Rs 132.40, Hindalco shed 2.31% to Rs 148, and Reliance Communications was off 1.37% to Rs 460.10. L&T dipped 0.12% to Rs 1,690, after hitting a high of Rs 1,717.90. The engineering and construction large-cap announced on Monday it had secured a $ 250 million contract to set up offshore platforms and related amenities.