Farm Loans Weigh on Banks

123jump.com Staff
05 Mar, 2008
New York City

Mumbai stocks rebounded after a three days of losses on the lat day of trading this week. Sensex jumped 1.2% or 202.10 to close at 16,542. Banks and realty stocks continued to decline after a surprise write-down from ICICI Bank. On the news, Indian Overseas Bank, Union Bank, Bank of Baroda, and Bank of India declined. Unitech, leading real estate developer, fell after it placed its $1.5 billion in interenational offering on hold.

[R]10:00AM New York, 7:30PM Mumbai – Sensex rebounded after a three-day loss on the last day of trading this week.[/R]

Market Sentiment

Indian market rebounded from a three-day decline with Sensex gained 1.2% or 202.10 to 16,542.08. The National Stock Market index, Nifty was up 1.2% or 57.15 at 4921.40 levels.

Bajaj Auto, Reliance Energy, Bharti Airtel, HDFC and Hindustan Unilever dragged the benchmark stocks lower. Reliance Industries gained. Satyam Computer, ITC, Housing Development Finance Corporation and Hindalco Industries were among index shares gainers.

Of the Sensex 30 index stocks, 19 gained and 11 stocks declined.

Banking shares dropped led by State Bank of India and ICICI bank. Banks are concerned that their profits margins would be hit after Finance Minister announced government would write-off loans, an estimated 600 billion rupees to small farmers.

Realty and power stocks were also battered. Stocks have continued trading in the negative since the announcement of the federal budget last week.

Of the BSE stocks, 760 shares advanced 1,942 declined and 48 stocks were unchanged.

Turnover

Daily turnover on the BSE stood at 5,348 crore rupees while daily revenue on the National Stock Exchange stood at 12,086 crore rupees.

Reliance Capital was the most active stock on the BSE with a turnover of 289.50 crore rupees. Reliance Energy, ICICI Bank, Reliance Natural Resources and Reliance Industries were also among the most active stocks on the BSE.

Gainers and Decliners

ICICI Bank fell 1.2% to 960.40 rupees as investors worried that more losses related to U.S. subprime loans at the bank may be announced. HDFC Bank fell 1.5% at 1336.40 rupees.

Satyam Computer gained 6.7% at 433.80 rupees, ITC was up 5.1% at 194.25 rupees and Housing Development Finance Corporation increased 4.5% to 2,755.25 rupees.

Hindalco Industries gained 4.1% at 208.10 rupees and Maruti Suzuki surged 3.8% at 940.15 rupees. Bajaj Auto declined 3.3% at 2128.05 rupees, and Bharti Airtel fell 2.4% at 750.2 rupees. Hindustan Unilever fell 1.5% at 225.55 rupees.

ONGC rose 3.1% to 987.90 rupees after the Macquarie Research raised the rating on the stock to ''outperform'' from ''neutral'' and raised 12-month price target to 1,100 rupees from 1,050 rupees.

Reliance Update

Reliance Industries rose 2.3% to 2,292.75 rupees. According to reports, RIL subsidiary, Reliance Retail will launch a chain of optical frames and sun glasses stores in India in a joint venture with Pearle Europe.

Reliance Energy lost 3% at 1459.45 rupees.