Mumbai to Open Higher, Fed Cut Rates

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

Stocks in India declined a day after the RBI left the key rates unchanged and as market digested earnings from Mahindra & Mahindra, NTPC, Bharti Airtel, and Baja Auto. Bajaj Auto fell 3% on the decline in earnings, Bharti Airtel rose 1.2% on 36% rise in earnings, and NTPC fell 4.6% after its profit fell 15%. Mahindra & Mahindra profit jumped 67% on the one-time gains. Government relaxed rules for foreign investing in several industries including civil aviation and petroleum refining.

[R]10:00AM New York, 7:30PM Mumbai-Sensex declined, India raised FDI caps in key economic sectors.[/R]

Market Sentiment

Indian markets closed weak on Wednesday with the BSE-benchmark sliding 1.9% or 345 at 17746.96. The CNX Nifty slid 2.1% or 113.2. The 50-share index closed at 5,167 levels.

Selling was visible in oil & gas, realty, information technology, banking and metal stocks.

Of the BSE shares, 2,007 shares lost, 744 advanced, and 39 shares remained unchanged. Among the 30 index shares, 22 stocks while the rest advanced.

Of the NSE-50 share, Zee Entertainment, Sun Pharma, SAIL and ACC were the key gainers with a rise of 0.8% or more.

Suzlon Energy, Hindustan Unilever, Reliance Petroleum and Reliance Energy were some of the key draggers in the broader index with a fall of 5.6% or more.

BHEL, Housing Development Finance, Tata Steel and Ambuja Cements led the positive sentiment in the BSE-30 share index. The stocks gained over 0.8% each.

Turnover on BSE was 4,042 crore rupees while revenue on the National Stock Exchange was 11,096 core rupees.

International Markets

In Tokyo Nikkei 225 Index closed lower 133.83 or 0.99% to 13,345.03, in Hong Kong Hang Seng index decreased 638.11 or 2.63% closed to 23,653.69, in Australia ASX 200 index lower 97.80 or 1.71% to close 5,618.70.

In South Korea Kospi Index decreased 48.85 or 2.98% to close at 1,589.06, in Thailand SET index closed higher 8.61 or 1.14% to 763.48, and Indonesia JSE Index edged increased 2.52 or 0.10% to 2,610.36. Sensex index in India decreased 333.30 or 1.84% to 17,758.64.

Foreign Investments

India has raised caps on foreign investment in civil aviation, refineries, some mining of minerals, and commodity exchanges on Wednesday as it hopes to attract international investment to sustain its development.

India is particularly looking abroad for financing of infrastructure improvements, including in its refining sector, and for producing key minerals such as titanium. India hopes to attract foreign investment of $26 billion in the current fiscal year that ends in March, substantially higher than $16 billion a year earlier.

The cabinet also ended a rule which made it mandatory for foreign firms to shed up to 26% of equity in favor of Indian partners or to public investors within five years for ventures involving the trading and marketing of petroleum products.

Gainers and Decliners

Of the BSE shares, Reliance Energy plunged 5.5% to 1,991.5 rupees on 8.80 lakh shares.

Reliance Energy led the decliners in the Sensex index and Bharat Heavy Electricals led the advancers.

Bharat Heavy Electricals on Tuesday announced it will invest 736 crore rupees or $187 million in upgrading its boiler capacity in southern India by 2009. The stock gained 1.4% to 2,079.9 rupees.

Auto shares slipped into the red on selling pressure. Bajaj Auto slipped 3.3% to 2,301 rupees. Bajaj Auto recorded 5.3% fall in net profit to 3,26.81 crore rupees during the third quarter of December 2007 from a year ago.

Tata Motors fell 3.3% to 692.2 rupees and Suzuki Maruti declined 1.9% to 841.25 rupees respectively.

Hindustan Unilever fell 5.2% to 195.50 rupees, Reliance Communications dropped 4.8% to 612 rupees, and Oil & Natural Gas Corporation declined 5.1% to 967 rupees.

Oil refiner Reliance Industries lost 4.2% to 2,467.8 rupees.

ICICI Bank slipped 3.1% to 1,183.05 rupees.

Real estate developer DLF posted net profit of 605.84 crore rupees on total income of 1,812.59 crore during the quarter of December 2007. DLF slipped 3.3% to 854 rupees on the BSE.


Earnings

Bharti Airtel rose after posting an increase of 36% rise in net profit to 1,419.84 crore rupees on 41.4% rise in total income 41.5% to 6,682.57 crore rupees in the third quarter of December 2007 from a year ago. The stock jumped 1.2% to 860.5 rupees.

National Thermal Power Corporation plunged after it announced a 15.47% fall in net profit to 1,779.9 crore rupees for the third quarter of December 2008 over the third quarter of 2007. NTPC slipped 4.6% to 202 rupees.

Tractor manufacturer Mahindra & Mahindra posted 67.6% rise in net profit to 405.15 crore rupees boosted by one times gain. The company''s sales rose 14.1% to 2,940.15 crore rupees during the third quarter of December 2007 over the third quarter of December 2006. The stock declined 1.5% to 691 rupees.


Contracts

Tata Steel was up 0.5% to 720 rupees, ACC rose 0.8% to 798 rupees.

Tata Consultancy Services slightly advanced 0.02% to 863.05 rupees after announcing that it had won a 100 million pounds, or $200 million, outsourcing contract from Sun Life Financial.