Elevated Inflation, MCX Sells Stake to NYSE

123jump.com Staff
15 Feb, 2008
New York City

Wholesale index, a measure of inflation, declined, for year ending two weeks ago. The annualized inflation, measured every week on a rolling 52-week period declined from 4.1% at the end of previous week. Prime Minister, ahead of election, remarked that controlling inflation should not be done at the expense of growth. India expects to grow at 9% and keep inflation below 5%. Indiabulls sold a stake in its real estate company to Farralon Capital and Laxmi Mittal.

[R]10:00AM New York, 7:30PM Mumbai-Sensex gained 2%, advancing for third day in a row.[/R]

Indian markets scaled higher for the third day in a row with the benchmark Sensex index climbing 2% or 348.62 at 18,115.25 levels. In the broader markers, Nifty jumped 1.9% or 100.9 at 5,302.90 levels.

On the BSE, 1,983 shares advanced, 763 shares declined and 47 shares remained unchanged. Realty stocks advanced while software share lagged behind. Oil stocks posted gains.

Daily turnover on the BSE amounted to 6,372 crore rupees lifted by Reliance Companies. On the National Stock Market, daily revenue stood at 14,206 crore rupees.

Reliance Power was the most active stock on the BSE with the turnover of 444.54 crore rupees. Reliance Natural Resources, Reliance Energy, Reliance Petroleum and Reliance Capital were also among the most active stocks.

Economic News

Prime Minister Manmohan Singh said keeping the lid on inflation rate was a priority for his government, but controlling the price-line did not mean growth would be sacrificed. Ahead of national election, Singh said that, “it is essential to ensure that the poor are not adversely affected by high inflation.” Higher inflation in energy and food prices impacts poor people more than middle class and rich people, as nearly 70% of people in India live on a daily wage of less than $2.

Wholesale price index-based inflation rate grew by 4.07% at the end of the week ended February 2, slower than the 4.11% at the end of the previous week. However the inflation is still above the RBI comfort level. The Reserve Bank of India kept its interest rate unchanged at the last meeting On Jan 29.

Gainers and Decliners

ICICI Bank rose 2.5% to 1,191.15 rupees.

Hindalco Industries gained 9% to 178.5 rupees, Tata Steel surged 5.1% to 818.5 rupees, Bajaj Auto advanced 4.8% to 2,174.75 rupees and State Bank of India rose 4.2% to 2,297.95 rupees.

Maruti Suzuki shed 2.1% to 812.75 rupees, TCS lost 0.3% to 871.5 rupees, Ambuja Cements slid 0.3% to 115.85 rupees and Satyam Computer was down 0.1% to 438.2 rupees.

National Aluminum Company was up 3.5% to 361.65 rupees and Steel Authority of India advanced 3.3% to 220.85 rupees.

Oil stocks rallied after the government announced hike in petrol and diesel prices by 2 rupees and 1 rupee respectively on Thursday.

Essar Oil gained 9.8% to 234.9 rupees, Indian Oil Corporation grew 4.5% to 560.65 rupees, HPCL surged 3.8% to 308.75 rupees and ONGC grew 0.7% to 1,033.3 rupees.

BSE Realty index rose 3.49% to 10,497.27. Unitech surged 6.7% to 417.15 rupees, Ansal Properties, Infrastructure gained 5% to 234.05 rupees and DLF climbed 1.6% to 878.95 rupees.

Software stocks lagged behind following overnight decline in the US market. Wipro closed up 1.1% to 420.25 rupees, TCS fell 0.3% to 871.5 rupees and Patni Computer shed 0.5% to 256.35 rupees. Indian IT firms generate more than half of their revenues from the U.S. exports.

Reliance Update

Reliance Industries rose 3% at 2,590.55 rupees on the news that it has secured approval from the Supreme Court to build part of an underground pipeline from the Krishna Godavari basin through a bird sanctuary.

Reliance Natural Resources surged 3.7% to 136.95 rupees. Reliance Power rose 4% to 384.7 rupees on volume of 1.17 crore shares on BSE. On Monday, the stock had debuted at 547.8 rupees, a premium of 21.7% over the IPO price of 450 rupees.

Reliance Capital rose 4.3% to 2,080.95 rupees. Reliance Capital Asset Management Company today said it has attracted 5,660 crore rupees in its new fund offer Reliance Natural Resources Fund.