Indian Stocks Drop Led by ICICI and State Bank

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

On Wednesday morning petroleum Minister Murli Deora will meet Finance Minister Chidambaram to seek duty cut to bail out state-run oil firms that are reeling under a financial burden in the wake of surging global crude. The IMF said India''s weekly inflation might be running at annualised rate of 3.4%, within the central bank''s comfort zone and below the official year-on-year rate near 8%. At close of Tuesday''s trade, the 30-share BSE Sensex fell 0.5% or 72.91 at 16,275.59.

[R]10:00AM New York, 7:30PM Mumbai - Petroleum Minister presses for duty reduction to bail out state run oil firms.[/R]

India Market Update

The BSE benchmark index edged lower on Tuesday led by losses recorded in banking stocks.

On Wednesday morning petroleum minister Murli Deora will meet Finance Minister P Chidambaram to seek duty cut to bail out state-run oil firms that are reeling under a financial burden in the wake of surging global crude.

The IMF said India''s weekly inflation might be running at annualised rate of 3.4%, within the central bank''s comfort zone and below the official year-on-year rate near 8%.

Bajaj Group on Tuesday listed two of its companies on the stock exchanges after it was demerged from Bajaj Holdings and Investments.

Market Sentiment

At close of Tuesday''s trade, the 30-share BSE Sensex fell 0.5% or 72.91 at 16,275.59. On the National Stock Exchange, the broader based S&P CNX Nifty traded lower at 0.3% or 15.25 at 4859.80.

Of the BSE traded stocks, 922 shares gained, 1,760 shares declined and 81 shares remained unchanged.

Turnover

Daily turnover on the BSE stood at 5074 crore rupees on the NSE.

Debutant Bajaj Finserve was the most active stock on the BSE with the highest turnover of 208.92 crore rupees followed by Reliance Capital, Reliance Industries, Aishwarya Telecom and Reliance Power.

Gainers and Losers

Major Sensex losers were Housing Development Finance Corporation at 2.1% lower at 2519.75 rupees, ONGC declined 1.3% at 884.35 rupees, and HDFC Bank lost 1.2% at 331.30 rupees.

Major Sensex gainers were Cipla up at 3% at 205.05 rupees, ITC added 1.7% at 209.10 rupees, and Ambuja Cements and NTPC climbed 1% each at 97.60 rupees 177.40 rupees respectively.

State Bank of India fell 4.2% at 1,473.30 rupees, on concerns the bank''s surprise hike of 25-50 basis points in deposit rates could put pressure on its operating profit margin in the short term.

In an announcement, State Bank of India said that two to three year term deposit rate will be raised to 8.75% from 8.5%, and five to ten year deposits would fetch 9% from 8.5%, effective from 1 June 2008.

The hike in deposit rates is aimed at attracting more funds to meet aggressive growth targets

ICICI Bank fell 1.7% at 812.55 rupees.

Reliance Companies Update

Reliance Communication 1.6% at 551.75 rupees on reports the proposed deal between Reliance Communications and South Africa''s MTN Group may involve an open offer by the South African telecom firm to the shareholders of Reliance Communications. The deal may result in a transfer of Anil Ambani''s two-third equity stake in Reliance Communications to MTN shareholders.

Reliance Industries declined 1.3% at 2,493.20 rupees and Reliance Infrastructure gained 0.9% at 1,259.30 rupees.

India''s inflation lower than data: IMF

India''s weekly inflation is running at annualised rate of 3.4%, within the central bank''s comfort zone and below the official year-on-year rate near 8%, according to an internal study by the International Monetary Fund.

The study has come at a time when latest government data showed preliminary annual inflation, as measured by the wholesale price index, at 7.8% in May and an upwardly revised 3-½ year high above 8% in mid-March.

The IMF study said using weekly or monthly changes in price data, which were then adjusted for seasonal effects, was better for measuring the rate of change in prices, as year-on-year changes were distorted due to base effects.

The study, made before a revision last Friday showed mid-March WPI above 8%, measured price changes in provisional data for the five weeks starting April 5 to May 3 after seasonally adjusting them. It showed inflation for that period running at an implied annual rate of 4.7%.

Deora to meet FM

Petroleum minister Murli Deora will on Wednesday morning meet Finance Minister P Chidambaram to seek duty cut to bail out state-run oil firms that are reeling under a financial burden in the wake of surging global crude.

The petroleum ministry is seeking lowering of customs duty on crude oil to zero from 5% and that on petrol and diesel to 2.5% from current 7.5%, but finance ministry is not obliging.

The continued rise in international oil prices that last week reached an all-time high of $135 a barrel has forced the government to mull options to save the oil firms, which expect a revenue loss of 2,00,000 crore rupees this fiscal on sale of petrol, diesel, domestic LPG and kerosene.

TCS secures US$100 million

Tata Consultancy Services has announced it has bagged a five-year contract worth $100 million (about 426 crore rupees) from Europe''s NXP Semiconductors B V.

TCS, India''s largest software exporter would provide high-end consulting services as well as application management, development and support services across NXP''s supply chain operations.

The company said the contract would be implemented through multiple centres in India, Asia and the US. These units would be supported by a high tech centre for excellence, based in Eindhoven.

Bajaj Auto lost on BSE, Bajaj FinServ of NSE

Bajaj Group on Tuesday listed two of its companies on the stock exchanges after it was demerged from Bajaj Holdings and Investments.

Group chairman Rahul Bajaj listed two-wheeler maker Bajaj Auto on the Bombay Stock Exchange, while Group vice-chairman Madhur Bajaj listed Bajaj FinServ on the National Stock Exchange.

With the listing of these firms, the Pune-based Bajaj has completed the process of demerger that began on May 2007.

Bajaj Holdings and Investments has 30% stake each in Bajaj Auto and Bajaj FinServ.