Sensex Dips on Rate Fears

Ivaylo
12 Jun, 2007
New York City

The benchmark index declined in mid-afternoon trading Tuesday after the release of industrial production data, which was far stronger than expected and raised worries that RBI might again raise interest rates to cool down the fast growing Indian economy. Satyam, Reliance Comms and Hindalco are the leading decliners, while ACC leads the advancers. Industrial production in India grew 13.6% annually in April 2007 much higher than 9.9% growth in April 2006.

[R]5:30AM NY-4:30PM Mumbai Sensex is down in mid-afternoon Tuesday on interest rate fears.[/R]

The Sensex in BSE is 68 points lower at 14,015.

The market-breadth is very weak, as there are almost three decliners for every advancer. For 1,826 which have declined, 615 have advanced and 73 are unchanged.

Advancers

Cement shares were strong as ACC is the leading advancer, up 2% to Rs 780, while Gujarat Ambuja Cements gained 0.7% to Rs 109 and Madras Cement was up 1% to Rs 2,555. Cement shares advanced after the Cement Manufacturers Association reported sales gained 10.6% in the period up to May, 2007.

Index heavy Reliance Industries edged 0.35% higher to Rs 1,674. Larsen & Toubro gained 0.5% to Rs 1,900 on securing orders from Oil & Natural Gas Corporation and Steel Authority of India.

Decliners

IT stocks plunged as the rupee advanced against the dollar. Satyam has plunged over 4% to Rs 476. Wipro was down 1.5% to Rs 535 and TCS shed 0.9% to Rs 1,210. Reliance Communications has dipped nearly 3% to Rs 491, and Hindalco has shed 2.6% to Rs 157.

HDFC Bank, SBI and Maruti have lost around 2% each to Rs 1,078, Rs 1,314 and Rs 720, respectively.