Record Sensex; Telecom, Consumer stocks Rally

123jump.com Staff
03 Jul, 2007
New York City

Sensex 30 in India closed at a record high for the second day in a row, up 1% to 14,806. Telecom and consumer products companies led the market rise. Spice Telecom, mobile telphone operator IPO was oversubscribed 37 times. Bharti Airtel awarded $900 million contract to Nokia Siemens venture. Hindustan Unilieve, State Bank of India and Bharti Airtel jump nearly 3%.Cement stocks rallied for the second week. Larsen toubro plans to sell its entire stake of 11% in UltraTech Cement.

[R]6:30PM Mumbai, 9:45 AM New York – Sensex reaches new record for the second day in a row. Telecom and consumer stocks power the rally.[/R]


Sensex in Mumbai trading jumped 1% or 142.25 to a record close at 14,806.51. Cement, engineering and textiles stocks lifted the index. The 14-month low inflation data reported on Friday, kept positive momentum at the opening. Banks, construction and telecoms stocks gained in the trading. Of the 30 stocks in the Sensex Index, 20 advanced and 10 declined.


IPO News

Spice Communications Ltd, joint venture between Telekom Malaysia and B.K. Modi Group, completed its initial public offering. The company raised 520 crore rupees ($128 million) by offering 113.1 million shares at Rs 46 per share. The company operates mobile phone network in states of Punjab and Karnataka. In the next two years company plans to build a national network and spend 700 crore rupees. The company stock is likely to start trading on July 19th or 20th. Modi Group will own 41% and Telekom Malaysia will control 39% after the offering.

According to industry estimates, at the end of March 2007, India had 166 million cell phone subscribers, a jump of 72 million in twelve months, and more than 6 million new subscribers are added every month.

Company News

Bharti Airtel has signed a two year contract with Nokia Siemens to enhance its fixed and wireless network, telecom in eight of the 23 telecom circles for $900 million. The joint venture between Nokia and Siemens is also likely to invest $100 million in India to support this contract. Bharti, has signed a similar contract late last year with Ericsson for $1 billion to expand its network in rural markets.

Gainers

Larsen & Toubro gained Rs 24.05 or 1.1% to close at 2,258.95 on the news reported in Times of India that company plans to sell its entire stake of 11.5% in UltraTech cement. Separately UltraTech reported 2.2% rise in June cement sales from a year ago.

Grasim Industries gained Rs 84.05 or 3.2% to close at Rs 2,702. Aditya Birla Group controlled companies Grasim and UltraTech reported 2.2% June cement sales increase to 2.53 million tons.

State Bank of India gained 3% on heavy volume of 10 lakh shares (1 million) to close at Rs 1,577. The bank is planning to enter seven new business ventures through its new subsidiary ICICI Bank gained 1.5% followed by 0.5% gain in HDFC and 0.3% rise in Bank of India. Private sector bank UTI advanced 2.3%.

Bharti Airtel jumped 3.5% or Rs 29.25 to close at Rs 866.60. A day after Morgan Stanley raised company rating; Company CEO Manoj Kohli estimated that industry is likely to add 7 million monthly new subscribers.

Declining inflation lifted stocks of consume products companies. Hindustan Lever and Colgate Palmolive jumped 3%, Britannia and ITC gained 1.5% and Tata Tea and increased 0.8%.

Reliance industries increased Rs 21 or 1.2% to close at Rs 1,705.45 on general positive sentiment.

Decliners

Reliance Energy Ltd dropped Rs 10 or 1.6% to close at Rs 614.30. The stock declined after Reliance Industries, supplier of gas to the utility company, said that it plans to appeal a recent court ruling that requires it to sell gas at a fixed price agreed several years ago.