Cement Stocks Rise, Sensex Falls

123jump.com Staff
04 Aug, 2008
New York City

Stocks in Mumbai trading fell, following a weak trading in the region. Elevated crude oil prices, persistent worries related to the U.S. economic health and rising inflation in India kept investors on the sidelines. Total trading on the BSE and NSE fell 10% to 20,000 crore rupees. Grasim Industries led the gainers in the benchmark Sensex index with a rise of 3.5% and TCS led the decliners with a fall of 2.6%. Cement stocks gained, despite a price freeze and weak demand in the current quarter.

[R]1:00PM New York, 10:30PM - Stocks in Mumbai decline on weak trading in the region on lower closing in the Western markets.[/R]

India market update

Indian benchmark index declined on Monday tracking weak markets in the region and lower closing on Friday in the U.S. and Europe. Stocks in capital goods, banking and power sectors fell. Metal, realty, fertilizers and select technology stocks were active in trading and closed higher.

Market sentiment

The benchmark index Sensex declined 0.5% or 78.82 at 14,577.87. The benchmark index opened lower and traded weak in the session. On the National Stock Exchange, The CNX Nifty index fell 0.4% or 18.2 at 4395.35.

Of the stocks traded on the BSE, 1,827 shares advanced, 837 shares declined and 56 shares remained unchanged.

Among the Sensex index shares, 19 shares declined while 11 shares gained.

Trading statistics

Daily turnover on the BSE stood at 5,987 crore rupees and on the NSE fell to 13,531 crore rupees from 15,700 crore rupees on Friday.

Reliance Natural Resources was the most active stock on the BSE with a turnover of 469 crore rupees followed by Reliance Capital, Reliance Industries, Essar Oil and Reliance Petroleum.

Reliance Natural Resources also led the most active by trading volume on the BSE with 4.50 crore shares followed by Ispat Industries, IFCI, Bellary Steels and Kashyap Technologies.

Inflation may Drop to 8%

Inflation may drop below 8% if global crude oil prices fall and if the rainfall meets expectations, according to the Prime Minister''s Economic Advisory Council Chairman C Rangarajan. He said the international oil prices are expected to remain at the current level. However, if the trend of declining oil prices continues it would help to bring down the prices.

The crude oil futures for the near month delivery have dropped to $123 a barrel after crossing $147 barrel on July 11.

Gainers and losers

Grasim led the gainers of the stocks in the Sensex index with a rise of 3.5% to 1,899.50 rupees. TCS led the decliners from the Sensex index, dropping 2.6% to 817.50 rupees.

UltraTech Cement Company was up 1.5% to 575 rupees and ACC rose 1.7% to 586.05 rupees.

Cement stocks advanced despite a decision to hold prices on low monsoon demand and an increase in capacity.

Cement companies, which agreed in May to hold prices for three months to help the government contain inflation, could find it difficult to raise rates when the moratorium ends on 14 August 2008.

Ranbaxy Laboratories gained 2.8% to 524 rupees after the United States District Court of Maryland gave 60 days to the drug maker to submit all documents sought by the Department of Justice.

Tata Steel gained 1.4% to 689.90 rupees. According to media reports, the company has consolidated all its overseas assets including Corus under a new holding company, Tata Steel Global, to raise funds for its overseas expansion including future acquisitions.

Tata Steel Global, based in Singapore with over $13 billion enterprise value, will raise funds for international acquisitions of smaller steel makers and mines.

Steel Authority of India gained 4.5% to 150.90 rupees on reports that the company has formed an equal stake joint venture with Manganese Ore India to produce 100,000 tons of ferro alloys used for steel making. The investment for the venture would be 400 crore rupees.

Auto stocks showed mixed trend.

Maruti Suzuki India gained 1.7% to 570.05 rupees. The company announced last week that its total sales rose 1.1% to 58,543 cars in July 2008 over the same period last week. Domestic sales grew 0.1% to 52,911 units while overseas exports climbed 11% to 5,632 units during the period under review over the same period a year earlier.

Tata Motors declined 1% to 394.50 rupees after the company reported a 3% decline in total sales to 40,729 units in July 2008 over July 2007. The company cited high interest rates and tighter financing for the purchases contributed to the decline.

India ranks 12th in the list of world''s top 15 automakers, which is led by Japan followed by the US and Germany. Other countries making it to list are Mexico, France, Korea, UK, Canada, Spain, Iran, Sweden, Brazil, Italy and Indonesia.

Oil and Natural Gas Corporation stock fell 1.7% to 981 rupees. The shipping ministry has granted permitted the company to purchase and use vessels regardless of is age. The permission is expected to save $8 billion to ONGC.

DLF stock dropped 1.37% to 513 rupees, Bhel stock fell 2.3% to 1,717 rupees, and Larsen & Toubro fell 1.3% to 2,656.70 rupees.

ICICI Bank declined 0.9% to 636.50 rupees, HDFC Bank lost 0.3% to 1,104 rupees and State Bank of India fell 0.2% to 1,497 rupees.

Reliance Companies Update

Reliance Communication rose 0.6% to 439.35 rupees. As per reports, Reliance Infratel, a unit of Reliance Communication is likely to defer its plan to list the company. Reliance Industries declined 2.5% at 2,241.25 rupees.