Metals, IT Rise, Cement Stocks Fall

123jump.com Staff
14 May, 2008
New York City

Mumbai stocks rose after a rise in IT and metal stocks. Rupee fell to a 13-month low to 42.44 against one dollar as rising crude oil import worries investors. Software exporters gained on rupee weakness. Metal and steel companies added in the trading after the government said it is considering industry request to review duties on metal exports. Cement companies fell on the worries that recent price weakness and rising new capacity will hurt the industry margins.

[R]10:00AM New York, 7:30PM Mumbai – As rupees weakened and government consider lifting duties on steel export, IT and steel companies gained in trading.[/R]

Market Sentiment

Stocks in Mumbai trading rose after a rise in software and metal stocks with the 30-share BSE Sensex advancing 1.4% or 225.49 at 16,978.35.

On the NSE, S&P CNX Nifty rose 1.1% or 53.95 to close at 5,011.75 levels. In Mumbai, 21 share in Sensex advanced while 9 shares fell. Of the BSE traded shares, 1,393 shares gained, 1,269 shares declined and 85 shares remained unchanged.

Turnover

Daily turnover on the BSE stood at 6,164 crore rupees and on the NSE volume increased to 12,731 crore rupees.

Aishwarya Telecom was the most active stock on the BSE with a turnover of 929.97 crore rupees followed by Reliance Petroleum, Reliance Capital, Tata Steel and Idea Cellular.

IPO payment rules eased

Market regulator SEBI on Wednesday approved an alternative mode of payment for public offering and rights issues. The new rules will require transfer of money to the company only for the stocks that are allotted. The new rules will keep money of stock purchase in the bank account till stock allotment is complete.

The revised rules will eliminate collection and refund of funds to a large number of applicants. At present refund can take up to three months.

Asian economy to persist despite US recession

Asian strong economic growth will persist despite the U.S. economic slowdown. Asian companies are increasingly exporting more to European and Asian nations as the region diversifies its export markets and a new breed of young and wealthy citizens drive consumption, investment bank Merrill Lynch said in a report.

The reports said inflation is a bigger risk to the region than a slowdown induced by a recession in the world’s largest economy in the United States. Despite a global credit crunch resulting from lending excesses and in some cases frauds, Asian economies grew 9.5% and with the largest economy in the region China growing at 11.5%.

Asian exports to Europe have been growing between 25% and 28% as euro hovers near a record high against dollar and economies in the Asia keep growing.

Gainers and Decliners

Of the BSE shares, Hindalco Industries gained 7.6% to 193.60 rupees and led the advancers in the Sensex index.

Oil & Natural Gas Corporation fell 6.1% to 936 rupees and led the decliners in the Sensex on fears the company may forced to offer higher discounts to state-run refiners as crude hit a record high.

Metal shares gained. Steel secretary Raghav Pandey said that the government is considering the demand of steel producers to roll back the export duty. Tata Steel rose 4.5% to 889.80 rupees, Hindustan Zinc gained 17.9% to 738.80 rupees, Sterlite Industries advanced 4.8% to 857.25 rupees and JSW Steel climbed 4.2% to 1,000.10 rupees.

Software exporters rose as rupee weakened to 13-month low against the dollar. A depreciating rupee augurs well for IT companies as they derive over 50% of their revenues from the exports to the markets where prices are determined in the U.S. dollar.

TCS closed up 7.1% to 969.70 rupees, Infosys Technologies surged 4.7% to 1,829.90 rupees and Wipro advanced 1.6% to 502.15 rupees.

India''s software and services exports are estimated to be about 187,478 crore rupees or $47 billion in the fiscal year ending in March 2008.

Cement producer shares fell following reports that they are cutting prices despite increase in input costs, mainly due to higher supply on account of new installed capacities and the government''s ban on export. Ambuja Cement was down 2.2% to 109.10 rupees and ACC lost 2.3% to 667.15 rupees.

Bharti Airtel advanced 3.5% to 850 rupees. The company on Wednesday said it has not made any bid to acquire MTN of South Africa.

Reliance Industries

Reliance Industries rebounded from early low of 2,484 rupees to settle 1% higher at 2,527.5 rupees. Reliance Infrastructure rose 4% to 1,436 rupees, Jaiprakash Associates gained 2.6% to 259.90 rupees and Maruti Suzuki India gained 3.5% to 796.80 rupees.

Asian Markets review

In Tokyo Nikkei 225 Index closed higher 164.82 or 1.18% to 14,118.55, in Hong Kong Hang Seng index decreased 19.29 or 0.08% closed to 25,533.48. In Australia ASX 200 index higher 60.00 or 1.03% to close 5,872.70. In Malaysia KL Composite index increased 1.20 or 0.09% closed to 1,287.74.

In South Korea Kospi Index increased 0.95 or 0.05% to close at 1,843.75, in Thailand SET index closed higher 9.66 or 1.15% to 848.94 and Indonesia JSE Index edged increased 30.44 or 1.26% to 2,449.34. Sensex index in India increased 225.49 or 1.35% to 16,978.35.