India Rallies on Reliance

Ivaylo
03 May, 2007
New York City

After a two-day break, the benchmark index opened with a positive bias Thursday and remained in positive territory throughout the session on strong global markets and robust earnings results from large-caps. Reliance Industries and Bajaj Auto led the advancers, while Tata Motors and HDFC Bank were the worst performing stocks. HDFC on Thursday reported 29% jump in fourth-quarter net profit for the current fiscal year.

[R]8:00AM NY-7:00PM Mumbai Sensex rallies Thursday on robust earnings from large-caps.[/R]

The Sensex on BSE finished 205.84 points, or 1.48%, higher at 14,078.21.

The market-breadth was strong as there were three gainers for every two decliners. As 1,557 stocks advanced, 1,016 declined and 87 stocks remained unchanged. Of the 30 stocks in the Sensex, 23 advanced, six declined and one remained unchanged. The turnover on BSE was Rs 4,413 crore, higher than Rs 3,282.23 crore on Monday. On NSE, the turnover was Rs 9,326.83 crore, much higher than Rs 7,571.21 crore on Monday.

Economic news

Out of the 60 notified Agri Export Zones, 54 have not been able to achieve forecast export and investments targets since 2001, according to Associated Chambers of Commerce and Industry of India.

Foreign investment companies in sensitive sectors like aviation, petroleum and retail could undergo changes next month when the government reviews the norms on foreign direct investment.

Trading highlights

IFCI was the most-active stock with a turnover of Rs 155 crore followed by Reliance Industries and Network FinCap.

Advancers

Bajaj Auto led the advancers, rallying 4.3% to Rs 2,551. The board meeting of the company is scheduled on May 17 2007, in Mumbai will probably include the demerger proposal, which is intended to unlock value for shareholders by separating the manufacturing and financial assets. Bajaj Auto continued its downward trend in motorcycle sales for the third straight month this year, with its April numbers, including exports, declining by 13% compared to the same month last year.

Index heavy Reliance Industries surged 4% to Rs 1,623. Reliance will pay over $600 million for hiring deep-sea drilling rigs for developing the gas fields in the prolific KG-D6 block off the east coast. KG-D6 is the world second largest deepwater find last decade.

Ranbaxy soared 3.5% to Rs 384, while Gujarat Ambuja and Hero Honda advanced over 3% each to Rs 122 and Rs 705, respectively. Hero Honda reported a 4.86% increase in vehicle sales during April 2007 at 2,62,544 units against 2,50,366 units in the same month last year. Hero Honda expects to maintain its growth momentum in the coming years. Bharti Airtel and Larsen & Toubro also settled up 2.7% each to Rs 834 and Rs 1,741, respectively.

Housing finance company HDFC reported 29% jump in net profit to Rs 550.05 crore for the fourth quarter ended March 2007 as compared to Rs 426.52 crore in the same time a year earlier. The total income surged around 405 to Rs 1,732.95 crore as against Rs 1,239.90 crore in the comparable period a year ago. The stock advanced 0.4% to Rs 1,667 on Thursday.

Decliners

Tata Motors and HDFC Bank led the decliners, dipping over 2% each to Rs 734 and Rs 1,006, respectively. Tata Motors plunged after rallying to a high of Rs 764.50, on posting total sales of 40,486 vehicles for April, a growth of 10.7% compared with 36,574 vehicles sold in April 2006.

Other prominent decliners included Hindustan Lever shedding 1.8% to Rs 196, and Reliance Communications losing 1% to Rs 472.

[R]6:30AM European shares declined Thursday on weak earnings reports from UBS and BMW.[/R]
European markets declined in mid-morning trade on Thursday. National benchmarks fell in 10 of the 17 western European markets that were open.

The German DAX Xetra 30 index lost 0.2% at 7,442.43 and the French CAC-40 index slipped 0.1% at 5,987.37. However, the U.K. FTSE 100 index rose 0.4% to 6,507.30.

Advancers

Royal Dutch Shell advanced 1.6% after saying that its first-quarter profit rose 6% to $7.28 billion, with improving profit in its gas and power, oil products and chemicals units countering declining profits at its largest arm, exploration and production. Competitor BP rose 1.5% in London, while Total climbed 0.8%.

Unilever rose 5.1%. It posted an unexpected increase in first-quarter profit, as cost savings and strong sales volumes outweighed currency effects and higher raw material prices. Dutch supermarket chain Ahold shares rose 2.8% in Amsterdam, after it agreed to sell its U.S. Foodservices business to private equity firms for $7.1 billion.

Decliners

Automaker BMW led the car making sector lower. Its shares declined 2.6% after the first-quarter profit of the company slipped just below analyst expectations and it reported a weaker margin. In IT news, Infineon Technologies lost 1.4%.

UBS fell the most in six months after the biggest Swiss bank reported a third straight decline in quarterly profit. UBS sank 2.7%. Shares in UBS competitor Credit Suisse lost 2.4%, also in Switzerland.

Sanofi-Aventis shares also lost ground. The first-quarter sales of the company grew 2% to 7.12 billion euros, or up 7% on a comparable basis; slightly lower than analyst estimates. Combined with lack of news on the status of a U.S. review of its weight-loss drug, Acomplia, Sanofi shares slipped 1.3%.

Commodities

Crude oil advanced after rebels attacked an oil facility for the third time this week in Nigeria, where unrest has cut about a quarter of the output of the country. Crude oil for June delivery rose 32 cents, or 0.5%, to $64 a barrel on the New York Mercantile Exchange, and traded for $63.88 early in London. Brent crude for June settlement gained 45 cents, or 0.7%, to $66.70 a barrel on London ICE Futures exchange.

Gold gained for the first time this week after Gold Fields Ltd., the world fourth-biggest producer of the metal, announced output declined at seven of its eight mines. Silver also increased. Gold for immediate delivery rose $2.85, or 0.4%, to $676 an ounce, after declining $8.40 in the first three days of this week. Silver rose 11.5 cents to $13.33 an ounce, its first gain this week.

Currencies

The dollar was mostly lower against other major currencies in European trading Wednesday. The euro traded at $1.3609, up from $1.3598 late Wednesday in New York. The British pound traded at $1.9924, up from $1.9896. The dollar fetched 120.12 Japanese yen, unchanged.

[R]5:00AM Corn gains on Wednesday, while gold, silver, energy stocks decline.[/R]
May corn gained 4.50 cents to end at $3.72 per bushel, while July settled 4.50 cents higher at $3.82, and December gained 1.75 cents to $3.8025. The front-month July soybeans settled 7.75 cents lower at $7.4850, and November soybeans ended 6.50 cents lower at $7.77. July wheat closed7.50 cents lower at $4.9350 a bushel.

June gold lost $2.20 to settle at $675.10 a troy ounce on the New York Mercantile Exchange, while July silver shed 3.5 cents to $13.335. July platinum lost $1.80 to $1,299.10 an ounce, while June palladium recorded an 80-cent gain to $374.95 an ounce. The most-active July copper contract advanced 1 cent to settle at $3.6445 per pound.

The June crude oil contract declined 725 cents at $63.68 a barrel after reaching $65.50 a barrel. The June heating oil contract dipped 3.03 cents to close at $1.8526 a gallon and June gasoline slipped 1.21 cents to finish at $2.2326 a gallon. June natural gas settled up 1.2 cents at $7.730 per million British thermal units.

On the New York Board of Trade, Arabica coffee futures for May delivery settled down 0.15 cent at $1.0170 a pound, with July off 0.15 cent at $1.0470. Most-active July cocoa added $21 to end at $1,855 a metric ton. Futures on raw sugar in foreign ports for July settled unchanged at 9.14 cents a pound, with October off 0.01 cent at 9.43 cents.