Reliance Group Leads Indian Stocks

123jump.com Staff
21 Sep, 2007
New York City

Reliance group of companies dominated trading in Mumbai, India today. Several companies in the group logged more than 5% gain at the end of the day. Foreign investments flows in India surged to $11 billion at then end of July surpassing $9 billion for the year 2006. Ambuja Cements added 2% on huge trading volume. Jignesh Shah controlled company, receives approval for the first electric power trading exchange. Indian Rupee trades near peak against dollar.

[R]10:00AM New York, 7:30PM Mumbai – Reliance group of companies dominated trading. Foreign investment in India surges to a record level.[/R]

Sensex in Mumbai recovered in the afternoon session to reverse the morning losses. The 30-share BSE Sensex was up 1.5% or 252.2 to 16,564.23 at the end of the morning session. Heavy buying in index stocks lifted the Sensex. Reliance group of companies dominated the market advance. The CNX Nifty 50 surged 2.1% or 100 to 4,847.55. Of the BSE shares, 615 shares rose, 1,149 lost, while 51 remained unchanged.

Of the Sensex 30-share index, 19 gained while the rests slid. The BSE net turnover surged to 8,192 crore rupees ($2.2 billion) from 7,212 crore rupees a day ago. Trading on the National Stock Exchange soared to 16,687.13 crore rupees ($4.2 billion) from 14,770.97 core rupees on Thursday.

Foreign fund flows reached $10.5 billion at the end of July with flows of record $5.75 billion in the month alone. Total foreign investment in the year 2006 was $8.8 billion. Number of foreign institutions registered in India jumped to 1,063 from 934 according to market regulators.

The World Bank former president has said developed countries were ill-prepared to deal with the ''tectonic shift'' in economic power towards developing nations, in particular to India and China. James Wolfensohn told a financial forum in Hong Kong that wealthy nations were still giving development countries a colonial treatment.

Wolfensohn said that while developing countries made up just 10 percent of global GDP in 1950, they would make up 65 percent of the total by 2050.

He said the economic growth particularly in China would result in the Asian economic powerhouse overtaking the United States as the world''s richest country by 2040, with India in third place by 2050. Wolfensohn noted that power was already shifting away from developing countries. He cited African countries are directly engaging with China and India bypassing Western nations.

Exports by Indian small to medium business reached 50 billion dollars in fiscal 2007, accounting for 40 per cent of the country''s total exports. The products exported include garments, chemicals and pharmaceuticals, engineering goods, processed foods, leather products and marine products. India has 12.5 million small to medium businesses employing 30 million people.

Of the Sensex 30 stocks, Reliance Energy led the gainers adding 2.5% to 1,012 rupees on 12.32 lakh shares. NTPC led the decliners with a fall of 2.5% to 184 rupees on 62.13 lakh shares.

Reliance group of companies dominated the trading. Reliance Petroleum led the group with a surge of 11% followed by 10% rise in Reliance Infrastructure, 9.2% in Adlabs, 5% in IPCL, and 2% in Reliance Communication and Reliance Capital. The total domination of the group was also seen in the daily turnover accounting for more than 20% of trading volume and 35% of trading value on the BSE.

Ambuja Cements advanced 2% to 149 rupees on sharp rise in trading volume of 7 crore shares with four blocks trades each of 1.6 crore shares at 149.50 rupees per share.

Reliance Industries gained 4.6% to 2,292 rupees on 8.70 lakh shares on news that the company has discovered oil deposits in its D4 block in the Krishna Godavari Basin. RIL completed the technical testing in the block KG (D4). ONGC, government controlled energy giant is seeking price increase for its natural gas to 4,500 rupees per thousand cubic meter from 3,200 rupees. The price increase if approved will help company to add revenue by 2,000 crore rupees.

State Bank of India gained 4% to 1,830 rupees, Bharti Airtel surged 3.5% to 922.25 rupees, and Hindustan Unilever added 3.13% to 220.85 rupees.

Financial Technologies added 0.5% to 2,705 rupees after it received approval to launch electronic exchange for electricity and energy trading. The exchange named Indian Energy Exchange will facilitate trading of surplus electricity among power producers.

Satyam Computers was down 0.3% to 420 rupees, Infosys Technologies ADR slipped 4.59% to $47.02. Other IT ADRs in New York trading also edged lower. Wipro slid 2.7% to $ 13.83, Patni Computer systems shed 2.3% to $ 23.28, and Satyam Computers retreated 3.70% to $24.76.

Other looser in the Sensex index were ITC which plunged 2.20% to 190 rupees, Hindalco eased 1.3% to 160 rupees, and Cipla lost 0.9% to 168 rupees.

[R]9:00 AM New York – Stocks are expected to open higher. Oil is trading lower. Gold is at elevated level. One euro buys $1.41.[/R]

Market futures in pre-market trading are indicating 0.3% higher opening for Dow, S&P 500, and Nasdaq.

Oracle ((ORCL)) reported revenue rise of 26% and earnings gain of 25%. Stock is up 20 cents to $21.50. Total revenue in the first quarter was up 26% to $4.5 billion. The database and middleware license were up 23% and application licenses were up 65%. Earnings in the quarter were up 25% to $840 million and net profit margin held steady at 19% for the quarter.

Nike ((NKE)) reported first quarter revenue increase of 11% to $4.2 billion and earnings surge of 51% to $569.7 million. Diluted earnings per share increased to $1.12 from $0.74. In the quarter revenue in the U.S. increased 2%, in Europe gained 16%, in Asia Pacific rose 22%, and in the Americas added 15%. Sales in the U.S. reached $1.63 billion and in Europe were $1.48 billion. Asia Pacific sales reached $630 million and in the Americas sales were $279 million.

Gross margin in the quarter declined to 44.8% from 44.1% a year ago.

Euro rises against dollar and now trades at $1.41.

[R]6:00AM New York, 7:00 Tokyo, Japan trades in negative territory closing 0.62%. Commodity and energy stocks continue on bullish streak.[/R]

Japan traded in negative territory after the U.S. Federal Reserve Chairman Bernanke intimated that prospects of a housing and economic recession in the U.S. are real, Japan’s prime export market. Of the Nikkei 225 stocks, 80 rose, 136 declined and 9 remained unchanged.

In Tokyo trading, the Nikkei 225 lost 101.18 or 0.62% to 16,312.61, while the broader Topix index shed 0.94% to 1,552.07. For the week Nikkei 225 index advanced 1.2% and Topix gained 0.5%.

Japan’s benchmark 10-year yield jumped to a five-week high of 1.7000%, tracking a surge in U.S. yields on the inflation worry. The Bank of Japan will be waiting for the Tankan survey, which measures business activity, to be released on October 1. A solid Tankan, will assure the BOJ that a 0.75% rate hike is possible.

A government survey on Thursday showed that companies planned to increase spending on capital equipment by 7.5% this year, compared. Japanese businesses increased investment by 10% in 2006, the fastest in 16 years. Also economists are pessimistic that the new Japanese premier to be elected on Sunday, widely tipped to be Yasuo Fukuda, will have the flexibility to carry out significant economic reforms.

Mitsui Fudosan Co., Japan''s biggest real estate company, is in advanced talks with Cerberus Capital Management to purchase 33% stake in Imperial Hotel Ltd for 90 billion yen. The Japanese government said yesterday commercial land prices gained 1% overall, the first increase since 1991. Imperial Hotel jumped 18% or 1,000 yen to 6,590 yen at the close of trading.

Sharp Corp and Pioneer Corp are in a deal to extend cross holding between two companies. Sharp will acquire 14% stake in Pioneer at 41 billion yen and Pioneer will purchase 0.9% stake in Sharp. Pioneer fell 2.2% to 1,370 on the news, earlier the stock had jumped nearly 3%.

Financial stocks decliners with Mitsubishi UFJ Nicos leading the Nikkei 225 index stocks shedding 32 yen or 13.4% on forecasts of a net loss of 111.8 billion yen for the year ending March 31 against projections of a 15.5 billion yen profit. The parent company Mitsubishi UFJ fell 4% to 1 million yen.

Resona Holdings fell 15,000 yen or 7.98%, followed by Credit Saison, which tumbled 170 or 6.31%. Movie and motion picture maker Toho Corporation declined 5.03% while Terumo Corporation fell 2.60 or 4.46%. Mitsubishi UFJ Financial Group fell 3.81% after saying it will take full ownership of an unprofitable credit card unit.

Leading export companies declined as they bore the brunt of a weakening dollar. Toyota lost 1.94%. The sell-off also affected Honda, Canon and Sony, which plunged 3.10%, 2.23% and 1.84% respectively.

Commodity stocks led the advancers as on rising metal and oil prices improved earnings sentiment. Tokyo Dome Corp gained 78 yen or 15%, followed by Sumitomo Metal Industries, which gained 6.33% on increased steel prices. A measure of six metals traded on the London Metals Exchange, jumped 4.6% on Thursday. Nickel led the gainers with a rise of 10% followed by sharp rises in zinc and copper.

Sumitomo Metal Mining and Sumitomo Chemical led the top five gainers firming 5.12% and 3.53% trekking the upward movement of commodities on the market.

Japanese biggest oil refiner Inpex firmed 2.5%. Crude oil prices surged for the seventh straight day on front month contract closing at a new record of $83.32 per barrel.

Canon plans to invest about 80 billion yen to build a factory in northern Japan to make ink cartridges for printers and photocopiers.

Casio Computer Company expects a 10 billion yen investment in new telephone models to return a profit in the first year, helped by sales of handsets equipped with its Exilim camera and G-Shock watch technologies, the company said. Casio close down 1.1%.