Indian Economy Grows at 9.3%

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

Sensex in India trading rebounded on the second quarter economic growth report. The GDP in the quarter jumped 9.3% lifted by strong growth above 10% in manufacturing and service sectors. Agriculture lagged with a growth of 3.6%. Wholesale price index, a measure of inflation, declined at the end of last week to 3.94%. First read in the last 20 months below 4%. Essar Oil is planning to raise $750 million in the international markets. Wipro has agreed to pay $160 milion for marketrx.

[R]10:00AM New York, 7:30PM Mumbai – Second quarter GDP growth was reported at 9.3%. Manufacturing and Service sectors grew at more than 10%.[/R]

Sensex in Mumbai trading jumped 196.86 or 1.3% to close at 15,318.60. CNX Nifty gained 51.70 or 1.17% to 4,464.

Of the stocks traded in Mumbai 1,653 gained, 1,049 declined, and 73 remained unchanged. Of the 30 stocks in the Sensex, 24 advanced and the rest declined. Daily turnover on the BSE exchange declined to 5,038 crore rupees from 5,668 crore rupees. The turnover on the NSE exchange dropped to 11,088 crore rupees from 15,126 crore rupees in the previous session.

State Bank of India closed up 1.6% to 1,596 rupees after three blocks of stocks totaling 2.45 lakhs (or 245,000) changed hands at a price of 1,886.75 rupees.

Manufacturing and services led the growth in economy in the second quarter. In the quarter the economy grew at 9.3% from a year ago led by 11.9% in manufacturing and 10.6% growth in services, and 3.6% in agriculture. The lag in farming has spread the benefits of economic growth unevenly to the urban region. Rural and agricultural driven regions in the country continue to suffer from low growth in productivity and investment.

Wholesale price index, a measure of annualized wholesale inflation declined to 3.94% ending on August 18 from 4.10% at the end of previous week.

Essar Oil is planning to raise $750 million in the international markets. The news sent the stock up 1.2% to 52 rupees.

Auto sector rallied led by Mahindra & Mahindra with a gain of 4.5% to 705 rupees in addition to 10% rise in the earlier session. The company is in early stages of exploring a bid for luxury divisions Jaguar and Land Rover of Ford Motor Company. In the rally, Maruti Udyog jumped 4.1% to 867 rupees and Tata Motors increased 3% to 701 rupees.

The court battle between NTPC and Reliance Industries inched further as both companies sought early hearing for the natural gas distribution dispute. NTPC jumped 4% to 172 rupees and Reliance increased 2.5% to 1,955 rupees.

Wipro ((WIT)) has agreed to pay $160 million for New Jersey, U.S.A based marketRx. The company provides web based marketing solutions for healthcare and pharmaceutical companies. The company provides web based sales and marketing tracking and customer behavior tools.

Stocks of sugar companies fell sharply after gaining in the last two trading session. Dwarikesh Sugar, Balrampur Chini, Shree Renuka Sugars and Bajaj Hindustan lost mre than 2%.

Hindustan Zinc surged 3% to 722 rupees after the reports that Sterlite Industries is looking to buy 29.54% stake and raise its holding in the company to 95%.

[R]7:00PM New York, 8:00PM Tokyo - Japanese stocks jumped the most in a fortnight spurred by a weaker yen. Japan fiscal budget for 2008 is likely to reach 85 trillion yen. Industrial production shrank 0.4% in July while unemployment rate dropped to 3.6%.[/R]

Tokyo rallied Friday helped by a falling yen and hopes that the U.S. government may take action to prevent subprime lending crisis from widening to the general economy. Japan climbed 2.6% on increased buying, adding to the 0.9% gain yesterday. Of the 225 Tokyo shares 210 gained, 13 dropped and 2 remained unchanged. Of the index shares, 16 stocks gained over 5%.

In Tokyo trading Nikkei 225 rose 2.57% or 415.27 to 16,569.09 led by exporters. Against the U.S. dollar, the yen weakened to 116.22 from over 115 yesterday while it dropped to 158.87 to the euro from 157.48 Thursday.

Japan Finance Ministry announced Thursday it expects fiscal 2008 budget to grow to 85.71 trillion, driven higher by escalating debt-servicing costs and domestic tax grants. The 2007 budget stood at 82.91 trillion yen. This would be the second straight state budget increase in two years despite Japan’s efforts to rebuild its strained national finances. The Ministry of Economy, Trade and Industry reported Japan''s industrial production shrank a seasonally adjusted 0.4% in July drained by powerful earthquake that hit Niigata Prefecture and hurt auto production. The index of output at mines and factories stood at 108.1 against the base of 100 for 2000. The quake paralysed the automobile industry, as production of auto parts stopped.

Government said Friday unemployment rate dropped 0.1 percentage points to 3.6% in July, the lowest in 9 years, and second straight monthly decline. In July, the number of unemployed reached 2.34 million, down 340,000 from a year earlier, the Ministry of Internal Affairs and Communications said in a preliminary report. However, analysts were less optimistic, saying the improvement only resulted from a decline in the country''s potential labour force — the total of jobholders and unemployed — due largely to a mass retirement of baby boomers. The total dropped 290,000 in July from June to a seasonally adjusted 66.46 million.

The Natural Resources and Energy Agency said today that Japan''s July crude oil imports rose 7.1% to 338.63 million barrels from a year ago, the second straight monthly increase. Imports from the Middle East accounted for 85%. Saudi Arabia remained Japan''s largest oil supplier in July, with its exports down 3.9% to 89.03 million barrels followed by The United Arab Emirates shipments falling 10% to 79.81 million barrels. Qatar with exports to Japan rose 13.7% to 41.65 million barrels. Iran ranked fourth with shipments surging 10.2% to 35.45 million barrels.

Of the Nikkei 225 stocks, exporters led the rising stock helped by a weaker yen. Furukuwa Electrical led gainers rising 8.3% followed by Fujikura Ltd up 7.32% and Minebea Co Ltd closed higher 6.8%. Mitsui & Co rose 6.64%. Technology stocks, Sony Corp, NTT Data Corp, TDK Corp and Fujifilm Holdings gained 5.5%, 5.1%, 4.9% and 4.6% respectively. Industrial and motor shares gained strongly as well. Of the index shares, energy related stocks fell after leading yesterday’s rebound. AEON Co Ltd led decliners falling 2.4% followed by Chugai Pharmacy down 2.12%. Shionogi & Co lost 1.4%, Isetan down 1.23% and retailer Mistukoshi Ltd ended lower 1.2%.