Deals, Earnings Drive Sensex

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

Market averages in India scaled higher led by strength in banks, media, and industrial companies. ahead of inflation report, investors speculated that interest rates are not likely to rise in the near future. Infosys plans to raise billing rate between 3% and 5% for its software services. Tata Steel jumps after reporting higher sales and earnings. Mahindra & Mahindra is exploring Jaguar and Land Rover purchase. UB Group and NDTV are in 100 crore rupee advertising deal.

[R]8:30AM New York – 6:00 PM Mumbai – Market in Mumbai trading advanced on broad rally. Deal making and expectation of lower inflation helped averages to gain.[/R]

Sensex in Mumbai trading jumped 0.86% or 128.7 to close at 15,121.74 and CNX Nifty increased 53 or 1.22% to close at 4,412.30.

Daily turnover on Bombay Stock Exchange rose to 5,378 crore rupees from 4,815 crore in the previous session. Turnover on National Stock Exchange increased to 6,171.7 crore rupees from 5,197 crore.

Of the stocks traded on BSE, 1,578 advanced, 1,112 declined, and 84 were unchanged. Among the stocks included in Sensex 21 edged higher and 7 fell. Mahindra & Mahindra led index stocks with a rise of 2.5% or 672 rupees.

M&M, truck and auto vehicle maker said that it is conducting due diligence to purchase Ford luxury car divisions Jaguar and Land Rover. Tata Motors gained 0.6% to 679 rupees.

Sugar companies rallied for the second day in a row after the report that the government is looking to blend 10% ethanol in petrol sales as early as October 2008. The government is also planning to reduce import duty to 5% from 7.5% on industrial ethanol.

Smaller mills Dwarikesh Sugar and Triveni Sugar jumped more than 10%. Baja Hindustan increased 2.5% to 137 rupees and Balrampur Chini Mills increased 2.7% to 61 rupees.

Sun TV Network gained 5.5% to 329 rupees on the news that that the company has purchased 49% stake in Red FM radio station to expand its business in the Northern India. NDTV added 3.5% to 351 rupees on the news reports that UB group has agreed to spend 100 crore rupees on the upcoming life style television channel NDTV Good Times.

Banks were in demand and closed higher in the rally as investors hoped that rate hikes are not likely in the near future. Traders speculated that inflation report due tomorrow will show lower rate of 3.9% from the latest report of 4.1% at the end of August 11.

Syndicate Bank led the sector with a gain of 2.8% to 76 rupees followed by HDFC Bank with a rise of 2% to 1,180 and Andhra Bank gain of 2% to 82 rupees. ICICI Bank increased 1.5% to 869 rupees. Vijaya Bank gained 5% to 56 rupees after the bank said that it plans to sell a stake in its asset management subsidiary.

Software exporters gained on the news report that Infosys plans to raise billing rates up to 4% for new customers and 3% for existing clients. Infosys jumped 1.4% to 1,860 rupees.

Tata Consultancy Services gained 0.8% to 1,040 rupees on the news that it has selected to provide a telecom services over several years for 574 crore rupees.

Bhel, power plant maker, was selected to install and manage power plant for a project worth 1,990 crore rupees. Bhel declined 0.9% to 1,835 rupees.

Tata Steel declined 0.5% to 656 rupees after soaring 9% to 659 rupees in the previous session. Yesterday the company reported consolidated first quarter result including recent acquisition of Corus. The sales rose 440% to 31,155 crore rupees and earnings increased 186% to 4,904 crore rupees. The net income increase reflected one time gain from higher pension asset valuation held for Corus.


[R]7:00AM New York, 8:00PM Tokyo - Japanese stocks recovered, ending two day losses lifted by higher U.S. stocks and rate cut hopes. Retail sales slump 2.2% in July. Japan proposes 2% hike in consumption tax to cover social welfare costs.[/R]

Shares in Japan rose on speculation the Federal Reserve will slash rates in September. Energy, electric and financial stocks led Japan higher 0.9% after losing 1.7% on Wednesday. Of the 225 Tokyo stocks 148 gained, 60 fell while 17 remained unchanged. Of the index shares, 11 stocks gained over 4% while 27 fell more than 1%.

In Tokyo trading Nikkei 225 gained 0.88% or 140.99 to 16,153.82 helped gains in energy related shares. The yen finished stronger at 115.52 to one dollar having closed yesterday at 116.17. To the euro, it ended firmer at 157.54 from 158.89. Yesterday, the yen had gained as high as 114 against the dollar at mid-day.

Japan’s Ministry of Economy, Trade and Industry announced Thursday July retail sales fell 2.2% to 11.4 trillion yen from a year ago, the second decline in as many months. Textiles and clothing sales fell the most in six years by 9.7% and dragged retail sales with it. The ministry’s preliminary report indicated that automobile sales dropped 4.8% and for machinery were down 4.7%.

Health, Labour and Welfare Minister Yoichi Masuzoe said today raising the consumption tax 2% to 7% is a viable option, which should help social welfare activities. Masuzoe said that tax hikes would become inevitable if the government has to cover mounting social security costs. ""We will endeavour to work on spending cuts but we have no choice but to ask people to pay more taxes in the future,"" Japanese media quoted him saying today. ""I consider it better to raise the consumption tax and disburse much of the increased tax income on welfare programs."" The minister is already under pressure to fix the missing papers of 50 million pension papers.

Of the Nikkei 225 shares energy related stocks led on firming crude oil prices. Mitsubishi Corp led movers gaining 6.6% after crude oil touched $73.51 today. Showa Shell followed up 5.64% and Nippon Mining pushed higher 4.8%. NSK Ltd surged 4.54% while Okuma Corp closed up 4.5%. Nippon Oil, Mitsubishi Chemicals, Mitsui Chemicals and Tokyo Gas Co Ltd all rose over 3%. Electric and some financials also gained. Yokohama Electric, Mitsubishi Electric, Chiba Bank and Yokohama Bank surged.

Of the index shares, retail stocks retreated after negative July retail sales data. Fast Retailing led decliners falling 3.1% followed by T&D Holdings Inc down 3% while Nippon Sheet Glass closed lower 2.91%. Hitachi Zosen and Mitsukoshi Ltd lost 2.6% and 2.43% respectively. Paper manufacturing firms and motor shares sank on similar retail sales sentiment. Nippon Paper Group, Mitsubishi Paper and OJI Paper fell 2.08%, 2.06% and 1.22% respectively. Mazda Motor, Mitsubishi Motors Co, Honda Motor Co and Nissan Motor Co fell between 0.8% and 1.6%.

Inpex Holdings Inc said Wednesday it will purchase a 35% stake in an oil and natural gas mining block in Suriname from Denmark''s Maersk Oil and Gas AS, Japan media reported today. Inpex said the 13,860-square-kilometre area, called Block 31, in the Guyana Basin off the northern coast of South America is recognised as having all the essential elements of a major hydrocarbon basin and promises to yield good quantities of petroleum and natural gas. Inpex shares closed unchanged at 1 million yen Tokyo.

Isuzu Motors Ltd and General Motors Corp said Wednesday they had signed a memorandum of understanding aimed at buttressing co-operation in the selling of trucks in Colombia, Venezuela and Ecuador. The firms said they were also studying the possibility of establishing a joint venture in the Andean region. Isuzu Motors finished up 2.34%.