India Drops With Regional Losses

123jump.com Staff
16 Aug, 2007
New York City

Sensex in Mumbai trading fell sharply reflecting Asia-wide decline. The Sensex opened lower after Independence Day holiday and fell sharply in the final hour of trading. Banks, real estate, and steel stocks led the declining stocks. DLF is in a deal to purchase DCM Shriram controlled textile mill complex for whopping 1,600 crore rupees. Tax collections are running 11% higher than a year ago according to Finance Ministry.

[R]8:30PM Mumbai, 11:00AM New York – Sensex in India fell sharply in sympathy with global declines. Investors remain cautious as U.S. subprime lending worries mount.[/R]

Sensex in Mumbai trading plunged 642.70 or 4.3% to 14,358.21, Nifty index fell 4.4% to 4,178.60. Asian markets declined across the region led by 7% loss in Korea and Malaysia. Second largest point decline in Sensex reflected worries that the U.S. subprime mortgage market crisis may deepen further and slow down the economy.

Daily turnover on the Bombay Stock Exchange increased to 5,291 crore rupees from 4,232 crore rupees and on NSE the turnover increased to 11,791 crore rupees from 7,832 crore rupees. Rupee recovered to 4-month high to 41.17 to a dollar.

Finance Ministry reported today that the indirect tax receipts collection increased 11.6% to 66,417 crore rupees in the period between April 2007 and July 2007 on higher than expected collection in customs receipts.

Recently listed real estate management company DLF closed 2.7% to 587 rupees on the news that it plans to spend nearly 20% of its IPO proceeds on land purchase in Delhi. The company is expected to complete its purchase of 38 acre land complex of Swatantra Bharat Mills controlled by DCM Shriram. The land deal worth 1,600 crore rupees is the largest real estate deal in the country. DCM Shriram fell nearly 2% to close at 84.20 rupees.

In other real estate industry news Parsvnath Developers plunged 9% to 299.80 rupees after the board approved the non-convertible debenture of 300 crore rupees. Unitech declined 8% followed by 6% fall in Indiabulls Real Estate and Sobha Developers.

Banks fell in sympathy with the global markets decline led by State Bank of India drop of 6% to 1,521, drop of 5.2% in ICICI Bank to 832 rupees, and 4.6% loss in HDFC Bank to 1,094.

Steel companies led the decliners in the market. Tata Steel plunged 10% to 576 rupees on 26 lakh or 2.6 million share volume. Sterlite Industries fell 8% to 558 rupees, Hindalco fell 5.6% to 145 rupees, and JSW Steel fell 5% to 614 rupees.

Reliance Industries fell 5% to 1,732.90 rupees. The company is expected to gain from the duty of 22,000 rupees per ton on processed yarn from China.

Housing Development and Infrastructure declined 7.5% to 504 rupees. The news report suggested that the company has entered in partnership with Lehman Brothers to develop land occupied by the largest slum in Dharavi, Mumbai.

Bharti Airtel dropped 7% to 798 rupees and Reliance Communication declined 5.7% to 494.35 rupees.

[R]8:30AM New York, 8:30PM Hong Kong – Asian markets fell sharply as fears grip market sentiment.[/R]

Asian markets were battered across the region as investors withdraw from markets. South Korea led the region with a loss of 6.93% followed sharp declines of 6.6% in Malaysia, 6% in Philippines, 5.94% in Indonesia, 4.5% in Taiwan and India, and more than 3% in Singapore, Taiwan and Hong Kong. Japan lost 2%.


In Sydney trading ASX 200 Index fell 76.5 or 1.32% at close to 5,711.50 after plunging 5.2% during the session. The sell-off in the Asian markets trading intensified as the worries related to the U.S. mortgage bonds sparked fears in the markets. Of the 201 stocks in the index, 147 stocks declined, 46 closed higher, and 8 were unchanged.

The Reserve Bank of Australia pumped A$3 billion in liquidity in addition to A$5 billion added to the system on August 10th. The added liquidity in the market is not helping to calm nervous investors. Ram, home builder and lender, said that it is having difficulty in funding its short term loans worth A$6.2 billion. Australian dollar declined to 80.4546 to one American dollar, a decline of 2.1% and the yield on the 10-year bond fell to 5.88765%.

National Australia Bank fell 1.1%, ANZ Banking Group declined 2%, and Westpac Banking fell 1.5%. Macquarie Bank lost 4%.

Sigma Pharmaceuticals led the index stocks with a loss of 12% followed by losses of 9.7% in Sino Gold, 9% in Murchison and Monadelphous, and 7% in Western Areas, Alco Finance, and Babcock & Brown. Alinta fell 6% on 35 million shares. Spotless Group led the gainers in the index with a rise of 5% followed by increases of 4.7% in Tower Australia, 4.2% in Ansell, and 3.84% in Zinflex. Paladin Resources jumped 2% on 10 million shares. News Corp jumped 2.2% on 6.7 million shares. Brambles increased 0.6% on 17 million shares. Of the most active stocks Telstra declined 1.8% on 69 million shares trading volume followed by BHP Billiton with a loss of 0.6% on 37 million shares. Macquarie Bank fell 4% on 9 million shares. James Hardie fell 5.5%.


In Hong Kong trading Hang Seng fell 3.3% or 703.33 to close at 20,672.39 with the index losing 12% from the peak. The index has lost nearly 6% in the last three trading sessions. Turnover on the main board was recorded at HK$104.9 billion and on GEM market was at HK$750.8 million.

Banks led the decliners. China Construction Bank fell 5.3% followed by 3% fall in Bank of China. Only two stocks in the index gained. Hang Lung Properties and Li & Fung Properties.

Li & Fung jumped 5.1% to HK$26.18 after reporting first half profit increase of 38% to HK$1.05 billion. The sales increased 35% to HK$37.77 billion ($4.8 billion) and core operating income increased 41% to HK$1.2 billion. The company increased dividend to 21 cents from 16 cents a year ago. The company guided that it is on target to achieve its three-year plan goal to reach U.S. $10 billion in sales and will release the next three-year plan in March 2008.

Hang Lung Properties increased 0.2% to HK$24.20 after reporting earnings gain of 25% to HK$2.05 billion. For the year ended in June 30, 2007, revenue jumped to HK4.4 billion from HK$3.6 billion and earnings increased to HK$6.3 billion on property value increases of HK$5.9 billion from HK$4.5 billion on property increase of HK$3.4 billion a year ago. Earnings per share increased to 159 HK cents from 119 HK cents.

China Mobile fell 4% after reporting first half earnings gain of 26% to 37.9 billion yuan on higher value added services and new subscribers added in the smaller towns. Total number of subscribers increased by 31.2 million to 332 million lifting the revenue to Rmb166.6 billion an increase of 21%. The earnings gained 26% from a year ago to Rmb37.9 billion. The revenue from value added services jumped 35% to Rmb41.9 billion. Total number of subscribers increased 31.146 million at average monthly net additions of over five million. Majority of these subscribers are pre-paid subscribers.


[R]6:00AM New York, 7:00PM Tokyo- Asian stocks suffered heavy losses on heightened investor concerns over the U.S. credit market turmoil. Nikkei 225 dropped 2% and in the region South Korea plunged 7% leading the decliners.[/R]

Asian shares were battered across the region as investors withdraw from markets. South Korea led the region with a loss of 6.93% followed sharp declines of 6.6% in Malaysia, 6% in Philippines, 5.94% in Indonesia, 4.5% in Taiwan and India, and more than 3% in Singapore, Taiwan and Hong Kong. Japan lost 2%.

In Tokyo trading Nikkei 225 lost 1.99% or 327.12 to 16,148.49 led by declines in industrial shares. Over 20 stocks in the index fell more than 4%. Out of the 225 shares in the index 196 fell, 25 gained and 4 traded unchanged.

The Bank of Japan yesterday said it would withdraw 2 trillion-yen from the market, as anxiety over a potential credit squeeze paled into insignificance. BOJ had earlier sucked another 1.6 trillion-yen from the market, funds pumped during the global credit crunch since last Friday. Overnight rates had fallen to as low as 0.2%, suggesting liquidity positions had improved, bank officials said. The yen firmed to 116 against the dollar with fresh prospects it may touch 115 per dollar.

Mistumi Electric led the decliners in the Nikkei index with a loss of 7.3% followed by losses of 5.4% in Toshiba, 5.3% in Kirin Holdings, 5% in Konica Minolta, Sojitz Corporation, Nikon, and Nippon Light Metals. Credit Saison and Shisei Bank fell nearly 4%. Secom Company led the gainers in the index with a rise of 4.6% followed by gains of 4% in Sumitomo Trust, 3.5% in Toho Company, and 2.8% in Mitsubishi UFJ.

Of the 225 stocks in the index 166 declined more than 1% and 11 gained more than 1%. Shipping companies, steel, and oil companies fell more than 2% in the sell-off. Japan Steelworks fell 3.6%, Kobe Steel dropped 4%, Nippon Oil lost 3%, and Mitsui OSK declined 1.8%.

In Seoul trading Kospi Composite Index plunged 7% to 1,691.98 after the Wednesday holiday break catching up with other Asian losses. Of the 733 shares in the index only 18 gained. Over 508 million shares worth 8.4 trillion won were traded. Government said the option to pump additional liquidity to steady financial markets was open.

Bank and oil related shares dropped sharply. Dong Wha Pharm lost 15% and Daehou Fire& Mor dropped 14.90%. S&T Motors crashed 14.79%. while Rocket Electric Co dragged 14.76%. Meritz Fire skid 13.60% with Sung Chang Enter falling 12.62%. Several hundred stocks fell by more than 10%. Bank stocks were also worried about the contagion effect of the U.S. subprime mortgage market. Myung Sung rallied 14.95% while Hyundai Paint Industries surged 14.79 %. Acts Corpn rose 14.78% while Ilshin Stone pushed 5.99%. Ilkyunh rose 1.99% with Sung Shin Cement surging 1.78%. FNC Kolon up 0.83% and Sung Bo Chemical added 0.64%.