Fed Cuts Rate, India and Asia Open Higher

123jump.com Staff
01 Nov, 2007
New York City

Stocks in Mumbai are expected to open higher led by a rally in Asian markets. In the overnight trading, the U.S. Federal Reserve lowered the target rate by 0.5% to 4.5%, sparking a rally in the emerging and Asian markets. Dollar fell to a record low against euro and declined against Japanese Yen. Markets in Australia, Hong Kong, and Indonesia rose in the morning trading. IT, retail, and infrastructure stocks are likekly to trade higher in India. Sensex Jumped 14% in October.

[R]9:30AM Mumbai – Sensex is likely to open higher after the U.S. Fed cuts rate and Asian markets rise.[/R]

The U.S. Federal Reserve lowered the rate by 0.5% to 4.5%, a second rate cut in as many months, to forestall economic slow-down in the U.S. The Bank of Japan left the rates unchanged but lowered the economic growth estimate for the fiscal 2007 to 1.8%.

Asian markets are trading higher in the morning after the U.S. lowered its rate for the second time in two months. Thailand is leading the region with a rise of 1.3% followed by 0.8% rise in Hong Kong, Australia, and Japan.

Mumbai is likely to open 0.5% higher on the U.S. rate cut and rising markets in the region. Rupee is likely to trade higher against the U.S. dollar.

In Wednesday’s trading in Mumbai, stocks edged higher led by a mild rally in capital goods and technology stocks. The 30-share BSE Sensex advanced 0.3% or 54.48 to 19.837.99. The S&P CNX Nifty rose 0.54% or 31.9 to 5.900.65. The Bombay Stock Exchange turnover stood at 10,020 crore rupees.

Of the Sensex share, 17 gained while the rest retreated. Of the BSE shares, 1,369 advanced, 1,346 fell while 361 remained unchanged.

SEBI chairman M Damodaran said the move to curb participatory notes investment was to increase transparency to the international investments and not restrict the fund flows. He said that the move is designed to encourage international investors register their investments with the market regulators.

Of the Sensex index, Reliance Energy jumped 4.3% to 1,866.8 rupees and led the stocks in the Sensex index. Hindustan Unilever led the declining stocks in the index with a loss of 5.21% to 207.60 rupees. Hindustan Unilever reported net income increase of 6%.

Power Grid of India reported net profit stood at 3,712.20 million rupees.

Hyderabad Industries reported a 68.57% increase in net profit to 11.80 million rupees for the second quarter ended September 2007 up from 7.00 million rupees a year ago. Hyderabad stock fell 3% after the report.

Tata Motors rose 1.25% 757.7 rupees. The company net profit surged 19.3% to 526.84 crore rupees on 1.09% rise in total revenue of 6,743.31 crore rupees in the second quarter.

Bharat Heavy shed 1.6% to 2,613.35 rupees, Larsen & Toubro slid 1.81% to 4,344.55 rupees, and Suzlon Energy retreated 0.3% to 1,973.65 rupees.

Infosys fell 0.7% to 1,839.1 rupees, Satyam Computer lost 0.4% to 477.65 rupees, and Wipro fell 1% to 504.8 rupees. Tata Consultancy Services slipped 1.01% to 1,037.9 rupees.

Tata Steel was up 0.7% to 904.5 rupees, Sterlite gained 0.4% to 1,023 rupees, while Hindalco Industries surged 1.5% to 196 rupees.

Hindalco Industries reported growth in net profit of 7.56% during the second quarter to 6,428 million rupees up from 5.976 million rupees in the previous year. Earnings per share slid 4.62% to 5.78 rupees from 6.06 rupees in the same period last year. Net sales grew 7.02% to 49,597 million rupees.

Oil and Natural Gas Corporation rose 2.3% to 1,247.9 rupees.

Bharti Airtel surged 0.7% to 1,006.6 rupees. The company reported a surge in net profit in the second quarter.

Reliance Industries gained 0.4% to 2,782.55 rupees, HDFC Bank grew 2.2% to 1,653.1 rupees and NTPC surged 2.3% to 239.4 rupees. Cipla declined 1.3% to 178.75 rupees.