Sensex Gains 0,7%, Inflation Below Forecasts

Ivaylo
30 Mar, 2007
New York City

The Sensex opened with a positive bias Friday, but trading was subdued in the morning session. The benchmark index surged in the latter part of trade as the crucial weekly inflation data turned out better than expected. Building up positions ahead of the fourth-quarter earnings results also aided the rally. NTPC and Dr Reddy

[R]8:00AM NY-7:00PM Mumbai Sensex gains on auto, pharma stocks.[/R]
The Sensex on BSE finished 92.44 points, or 0.71%, higher at 13,072.10. The market-breadth was strong as there were two advancers for each decliner. As 1,676 stocks advanced, 864 declined, and 70 stocks remained unchanged. Of the 30 stocks in the Sensex, 23 advanced, while the rest declined. The turnover on BSE was Rs 2,974 crore, lower than Rs 3,692.27 crore on Thursday. On NSE, the turnover was Rs 7,517.79 crore, compared with Rs 10,009.89 crore on Thursday.

Economic news

The wholesale price index in India increased 6.46% in the 12 months to March 17, matching the increase in the previous week, data showed on Friday. The figure was slightly below a forecast of 6.50%.

The foreign investment regulator of India has delayed a decision on Vodafone plans to buy controlling stake of Hutchison Telecom in Hutchison Essar. After a meeting of the Foreign Investment Promotion Board, Finance Secretary Ashok Jha said that the board had asked for more details on the deal.

Trade Minister Kamal Nath admitted on Friday that Indian import duties on wines and spirits are high and added he expects the situation to be corrected. The European Union is escalating a dispute with India at the World Trade Organisation, over what it sees as unfair trade barriers for its wine and spirits.

Trading highlights

Indiabulls Real Estate was the most-active stock with a turnover of Rs 174.55 crore followed by Renuka Sugar and Reliance Industries.

Advancers

Dr.Reddy''s rallied 3.1% to Rs 728 and the other pharma large-caps Ranbaxy Laboratories edged up 2.1% to Rs 353. NTPC surged 3% Rs 150, respectively and ITC soared 2.5% to Rs 150. NTPC announced it had signed an agreement with KFW, Germany, for a term-loan of $100 million. The loan agreement, which state-run NTPC signed, is an unsecured facility without sovereign guarantee bearing variable interest linked to LIBOR, and has a maturity of 10 years.

Tata Motors rose 1.8% to Rs 728. Tata Motors plans to set up one more automobile plant in the country within two years. Gujarat Ambuja, Tata Steel and Satyam rallied around 2% each to Rs 107, Rs 450 and Rs 470, respectively. Index heavyReliance Industries advanced 1.22% to Rs 1,372.60, as 5.66 lakh shares were traded on BSE. The stock hit a high of Rs 1,373.50.

Decliners

It stocks were heavily hit by the rise of the rupee this week. The rupee touched a seven-year high against the dollar. IT large-cap Wipro led the decliners, down 1.3% to Rs 558, on a volume of 2.16 lakh shares.

Other declineers included HDFC, down 1% to Rs 1,520, TCS, dipping 1.3% to Rs 1,231 and BHEL, losing 0.8% to Rs 2,261.

[R]6:30AM European stocks were lower on Friday on financials and telecom stocks.[/R]
European markets were lower on Friday. By mid morning, Frankfurt Xetra Dax was fractionally lower at 6,893.94, the CAC 40 in Paris fell 0.2% to 5,618.07 and London FTSE 100 shed 0.3% to 6,303.5.

Advancers

German financial stocks advnaced on takeover speculation on comments from Citigroup earlier in the week that hinted the US bank was looking possible targets in Germany. Commerzbank gained 2.8%, while Deutsche Bank added 1%, and Deutsche Postbank climbed 1.6%.

Decliners

Britain Vodafone led telecommunications stocks down as it warned of tough competition and regulatory pressures through to 2008. The stock fell 3.3%. Telekom Austria fell 1.9% after Bear Stearns lowered its target price. Shares in Telenor fell 1.4%.

Oil and gold

Oil prices kept rallying Friday as a standoff between Britain and Iran was taken to the United Nations and a nervous market worried that oil exports could be affected by the crisis. After settling at a six-month high a day earlier, crude oil futures rose another 45 cents to $66.48 a barrel on the New York Mercantile Exchange.

Gold opened Friday at a bid price of $662.90 a troy ounce, up from $658.70 late Thursday.

Currencies

The euro fell slightly against the dollar on Friday, a day after it gained on the U.S. currency following a dim growth report on the U.S. economy. The euro bought $1.3318, dropping marginally from $1.3335 in late New York trading on Thursday. The British pound also lost ground to the dollar, dropping to $1.9570 from $1.9619 in New York. The dollar edged up slightly on the Japanese yen, to 118 yen, from 117.9 the previous day.

[R]5:30AM Gold finishes lower, while copper and crude oil advance.[/R]
June gold shed $5.30 to end at $667.60 a troy ounce on the New York Mercantile Exchange, while May silver lost 11.5 cents to close at $13.34 an ounce. July platinum fell $10.20 to close at $1,247.60 an ounce, while June palladium was off $1.85 to settle at $356 an ounce. The most-active May copper contract gained 2.4 cents to settle at $3.0865 per pound.

The May crude oil futures contract gained $66.50 a barrel before finishing at $66.03 a barrel, up $1.95. April heating oil surged 4.98 cents to finish at $1.8772 a gallon. April gasoline soared 7.83 cents to $2.1355 a gallon. Front-month May natural gas futures, though, lost 6.3 cents to close at $7.609 a million British thermal units.

On the New York Board of Trade, Arabica coffee futures declined, reaching the lowest levels in a week an a half, on selling by funds and locals. May coffee finished 2.1 cents lower at $1.1060 a pound, and July coffee closed 2 cents weaker at $1.1350 a pound. Futures on raw sugar in foreign ports dipped to six-month lows as funds sold the front months. May sugar ended 0.27 cents lower at 9.85 cents a pound, while July sugar closed 0.24 cents weaker at 9.96 cents a pound.