Large and Mid Cap Stocks Fall

123jump.com Staff
24 Jan, 2008
New York City

Stocks in Mumbai trading fell after a weakness in mid and large cap stocks. The goverment is looking to moderate fund flows in the capital market from international investors. The market volatility and rising inflation are driving the goverment review. The BSE 30-share Sensex declined 2.1% or 372.33 to 17,221.74. The broader CNX S&P Nifty slipped 3.3% or 169.95 to 5,033.45. Trading voulme has declined on the BSE and NSE exchanges.

[R]10:00AM New York, 7:30PM Mumbai – Sensex fell on the weakness in mid and large cap stocks.[/R]

Stock markets declined on the weakness in large and mid cap stocks. Reliance Energy and Reliance Industries fell.

The BSE 30-share Sensex declined 2.1% or 372.33 to 17,221.74. The broader CNX S&P Nifty slipped 3.3% or 169.95 to 5,033.45.

As 2,328 shares on the BSE declined, 400 stocks advanced and 16 shares remained unchanged. Of the Sensex index, 23 stocks fell and 7 climbed.

Trading turnover on the BSE was 6,364 crore rupees as compared to 7,133 crore rupees on Wednesday and on the National Stock Exchange stood at 17,209 crore rupees.

Reliance group of stocks dominated trading. Reliance Natural Resources was the most active share on the BSE with turnover of 408 crore rupees followed by Reliance Industries, Reliance Petroleum, Reliance Energy and Reliance Capital.

The Finance Minister said there was a need to moderate capital inflows without hurting the flow of capital that stimulates the economy. The government is worried that capital flows in the country are adding stoking inflation.

Of the BSE share Reliance Energy led the decliners in the Sensex index. The country''s largest power utility in terms of net profit fell 9.3% to 1,805 rupees. National Thermal Power Corporation lost 8.8% to 204 rupees.

Reliance Industries slid 2.8% to 2,484.7 rupees.

Hindalco lost 6.7% to 150.05 rupees, Oil & Natural Gas Corporation shed 5.5% to 937 rupees, and Wipro declined 6.05% to 405 rupees.

Housing Development Finance Corporation gained 3.13% to 2,611 rupees in a volatile trading and led the gainers in the Sensex index.

Of the Sensex stocks, Satyam Computer Services added 2.01% to 401 rupees, cement maker ACC was up 1.7% to 762 rupees, and Reliance Communications increased 1.1% to 621.25 rupees.

ICICI Bank lost 1.4% to 1,135.05 rupees on reports, ICICI Securities, the investment banking and broking unit of ICICI Bank reportedly aims to raise up to $1 billion through a pre-IPO placement of shares.

State Bank, the country''s largest commercial bank surged 0.9% to 2,345 rupees.

Larsen & Toubro slipped 5.2% to 3,555 rupees despite securing orders worth 1,057 crore rupees from the Gulf region on Wednesday.

Hindustan Unilever declined 3% to 183.9 rupees after trading as high as 203 rupees.

Bharti Airtel climbed 0.6% to 852 rupees on high volume of 16.70 lakh shares. A single block of 12.72 lakh shares (or 1.272 million) was executed in the stock on BSE at 850.5 rupees.

DLF lost 2% to 905 rupees.


[R]6:00AM New York, 6:00PM Hong Kong - Hong Kong trade deficit increased to HK$27.4 billion in December. China trade surplus rises and GDP in 2007 rose at 11.4%. Inflation remains a major threat.[/R]

Stocks in Hong Kong plummeted on a government report showing that trade deficit widened and on rising expectations that credit market turmoil will persist.

In Hong Kong trading Hang Seng Index declined 2.3% or 550.90 at 23,539.27, while the China Enterprises Index plunged 2.61% at 12,933.20.

Daily turnover on the main-board was HK$142.4 billion compared to HK$156.4 billion yesterday.

The Hong Kong government reported on its website today that export shipments rose 8.2% year to HK$232 billion in December from a year ago, while imports soared 10.3% to HK$259.7 billion, yielding a trade deficit of HK$27.4 billion.

Exports to China spiked 21.7% in December from a year earlier.

According to the government report, cumulative exports last year gained 9.2% from a year earlier. However imports gained 10.3% driven by rising oil prices.

Trade deficit in 2007 stood at HK$180.5 billion.

National Bureau of Statistics reported today in Beijing that the China’s Gross Domestic Product in 2007 increased to 11.4% from the revised 11% in 2006 to 24.66 trillion yen ($3.41 trillion).

China’s foreign trade soared 23.5% to $2.17 trillion. Exports edged up 25.7% to $1.22 trillion, while imports grew 20.8% to $955.8 billion and trade surplus advanced 47.7% to $262 billion.

China’s industrial output in 2007 rose 3.7% to Rmb 2.89 trillion and 13.4% at Rmb 12.14 trillion, while the tertiary sector advanced to 9.63% at Rmb 9.63 trillion.

The statistics office also added that production at major enterprises, with annual sales of Rmb 5 million, surged 18.5% from a year ago, with aggregate profit reaching Rmb 22.95 trillion.

Spending on fixed assets in 2007 increased by 25.7% to Rmb 13.72 trillion.

Inflation remains a major threat to the Chinese economy. Inflation in 2007 tripled to 4.8% from 2006 on food price increase of 12.3% in 2007. Consumer price index in December fell to a growth of 6.5% from 6.9% in November and is running above the central bank target of 3%.


Financial stocks declined on remarks by Chief Executive of the Hong Kong Monetary Joseph Yam Chi-kwong today that notwithstanding the aggressive interest rate cut by the U.S. Federal Reserve it will take time before the situation normalizes.

Kwong added that the credit crunch is being caused by capital inadequacies at financial institutions rather than the pricing of credit.

Bank of China Communications shed 0.45% to HK$8.86, HSBC Holdings declined 0.69% at HK$115.40 and China Life slipped 3.3%.

The Hong Kong Exchanges and Clearing jumped 4.2% on speculation that China will permit mainland investors to invest in Hong Kong stocks in the second quarter.

China Oilfield Services slumped 12% after reporting today that it failed to expand offshore.


Asian Markets Update

In Tokyo Nikkei 225 Index closed higher 263.72 or 2.06% to 13,092.78, in Hong Kong Hang Seng index decreased 550.90 or 2.29% closed to 23,539.27, in Australia ASX 200 index higher 168.10 or 3.11% to close 5,580.40.

In South Korea Kospi Index increased 34.58 or 2.12% to close at 1,663.00, in Thailand SET index closed lower 12.07 or 1.63% to 728.58, and Indonesia JSE Index edged increased 40.42 or 1.63% to 2,516.70. Sensex index in India decreased 372.30 or 2.12% to 17,221.74.


[R]5:00AM New York, 7:00PM Tokyo - Japan’s December trade surplus declined 20.9% from a year ago to 877.8 billion yen in December.[/R]

In Tokyo trading Nikkei 225 surged 2.06% or 263.72 to 13,092.78.

In the first section of the Tokyo Stock Exchange 10.8 billion shares worth 1.2 trillion yen were traded and in the second section 305 million shares valued at 4.9 billion yen changed hands.

Of the Nikkei 225 stocks 185 gained, 36 declined, and 3 were unchanged.

Buyers returned to the market and realty, export sensitive, and automobile companies led the gainers. Mitsui Fudosan led gainers with an advance of 10.05%.

Japan’s Ministry of Finance revealed on its website today that exports in Japan rose 6.9% from 6.9 trillion a year earlier to 7.4 trillion yen in December, while imports rose 12.1% year on year from 5.8 trillion yen to 6.5 trillion yen. Trade surplus in December fell 20.9% from 1.1 trillion yen from a year earlier to 877.9 billion yen.

Combined exports to China and Hong Kong in 2007 rose to 17.4 trillion yen, with exports to mainland China rising 19% to 12.8 trillion yen.

However exports to U.S. in 2007 fell for the first time in four years by 0.2% in 2007 to 16.9 trillion yen, ceding its biggest export market status for Japan’s shipments to China.

The finance ministry added that total exports in 2007 rose 11.6%to 83.9 trillion yen leveraged by shipments of cars, steel and telecommunications equipment. Conversely, imports rose by 8.6% to a record 72.12 trillion yen, driven by a 7.4% gain in crude oil imports.

December exports to the U.S. fell for the fourth straight month by 4.5% from a year earlier to 1.42 trillion yen and exports to China grew 8.4% in December to 1.16 trillion yen.

Exports to the European Union also declined to 2.4% rise in December from a year ago from 8.2% rise in November.

The Financial Times reported yesterday that New York Insurance Superintendent Eric Dinallo engaged banking executives yesterday in a bid to pool an initial capital of $5 billion to support specialist insurers known.

Dinallo ultimately intends to persuade financial institutions to commit as much as $15 billion to support insurance and help buffer against future losses and write-downs.

Analysts estimate that if bond insurers continue to lose ratings it will result in more than $200 billion in losses in CDO bonds will be forced on bank’s balance sheets.

Of the Nikkei 225 index shares Mitsui Fudosan led advancing stocks with a rise of 10.05% followed by gains of 9.59% in Daiwa House Industries, of 9.28% in Mitsui Sumitomo Insurance, of 9.09% in Sumco Corporation, and of 8.62% in Chiyoda Corporation.

Tokyu Land Corp shed 8.45% and Mitsubishi Estate Company tumbled 8.37%.

Chiyoda Corporation rose after UBS AG upgraded the stock’s rating from “neutral” to “buy”, citing reduced raw material and labor costs.

Advantest Corporation led a decliners in Nikkei 225 index shares with a drop of 9.15% followed by losses of 5.93% in Nippon Paper Group, of 4.24% in Kikkoman Corporation, of 2.51% in Seven & I Holdings, and of 2.16% in Konica Minolta.

Advantest Corporation plunged after the Nikkei reported that the chipmakers operating profit might fall 40% in the current fiscal year ending in March 2008.