Weak Rupee, Tata Motors Protests

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

Stocks in Mumbai recovered a fraction as markets in the region rallied. Rupee continued its slide against the dollar as importers increase the demand for dollar and crude oil imports hover above $8 billion a month. The 60% rise in fuel price has kept the trade deficit higher. Gold in rupee is expected to edge higher.

[R]10:00AM New York, 7:30 PM Mumbai- Financial stocks and refiners lead gains in Sensex. Rupee falls against dollar to 18-month low.[/R]

Market Sentiment

Stocks in India rose marginally as gains registered in the morning session were trimmed by a bout of profit taking. Rupee fell against dollar as month-end buying from importers drive the demand for the U.S. dollar higher. Crude oil imports continue to dominate India’s import basket and 60% rise in crude oil price has lifted the monthly import bill to $8 billion from $5.5 billion a year ago. So far for the year, international investors have been net sellers of stocks in India with a net sale of $7.2 billion compared to the same period last year.

In Mumbai, the 30-share Sensex increased 0.34% or 48.86 to 14,672.69, and the CNX Nifty rose 0.18% or 7.90 to 4,335.35.

Of the stocks traded on the BSE, 1312 rose, 1322 declined and 89 remained unchanged.

Trading Statistics

Daily turnover on BSE stood at 3239 crore rupees from 4,066.93 crore rupees on Friday last week.

Hindustan Petroleum Corporation rose 3.48% to 206.50 rupees, Bharat Petroleum Corporation advanced 1.25% to 296 rupees, and India Oil Corporation soared 1.75% to 403.50 rupees.

Gold in Rupee May Rise

Gold in international markets has been weak as dollar has rebounded against most currencies in the last one month. The U.S. dollar jumped to 2-year high against British pound as economies in euro zone and in UK falter. The recent strength of dollar is not rooted in the strength of the U.S. economy but on the expectations of lower interest rate in the euro zone and in UK as economies in the European region weaken.

Traders speculate that gold may rebound in rupee as buyers look to make purchase ahead of festival season.

Gainers & Losers

Financial stocks rose in today’s trading following speculation in the banking industry that Korea Development Bank may explore to acquire Lehman Brothers. ICICI Bank increased 1.47% to 654 rupees, HDFC Bank advanced 1.21% to 1209.20 rupees, and State Bank of India soared 0.81% to 1357.10 rupees.

State- run banks also increased as well. Canara Bank rallied 1.35% to 203.40 rupees, Bank of Baroda soared 3.60% to 263.25 rupees, and Union Bank of India increased 2.25% to 132 rupees.

Real estate stocks increased. DLF edged up 2.06% to 493.90 rupees, Unitech gained 0.80% to 160 rupees.

Tata Motors rose 2.21% to 435 rupees notwithstanding protests by Trinamool Congress for 400 acres of land taken for the Nano small-car project in Singur in Orissa and may be returned to farmers.

Telecommunication companies increased. Reliance Communications spiked 0.37% to 407.25 rupees and Bharti Airtel gained 1% to 814.90 rupees.

Oil exploration fell after oil prices for October delivery tumbled 5.43% to $114.59 a barrel as Russian began a pull-back from Georgia. Oil & natural Gas Corporation shed 0.67% to 1,009 rupees and Cairn India plummeted 1.19% to 244 rupees.

Software exporters rose on a weaker rupee. Infosys Technologies increased 0.59% to 1,705 rupees, Satyam Computer Services soared 1.42% to 391.90 rupees, and Wipro jumped 0.14% to 418.15 rupees, but TCS declined 0.23% to 816.50 rupees.

Jaiprakash Associates fell 3.4% to 158.65 rupees.

Commodity stocks slumped. Tata Steel declined 2.25% to 581 rupees, Sterlite Industries shed 1.64% to 616.50 rupees, and Hindalco Industries plunged 0.22% to 134.25 rupees.

Ranbaxy Laboratories plunged 2.26% to 511 rupees on news that its acquisition of a controlling stake Daiichi Sankyo, Japan''s third-largest drugmaker needs the approval of the Cabinet Committee on Economic Affairs because it exceeds 600 crore rupees.

Himalya International surged 20% to 26.30 rupees after the company said it has formed an alliance with Bharti Wal-Mart and its parent Wal-Mart for selling food products in India.

Gujarat Apollo Industries jumped 4.04% to 182.90 rupees after the company said its board has recommended issue of two bonus share for each share.

Jet Airways (India) increased 1.34% to 462 rupees on news the company will merge its wholly owned subsidiary JetLite with the company in the current fiscal.

Housing Development Finance Corporation surged 3.30% to 2356 rupees.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 212.62 or 1.68% to 12,878.66, , Hang Seng index in Hong Kong increased 712.73 or 3.50% closed to 21,104.79.ASX 200 index in Australia increased 83.50 or 1.69% to close 5,014.90. The KL Composite index in Malaysia decreased 6.87 or 0.63% closed to 1,078.73.

The Kospi Index in South Korea increased 5.20 or 0.35% to close at 1,502.11, SET index in Thailand closed lower 3.73 or 0.55% to 678.20 and JSE Index in Indonesia increased 6.73 or 0.32% to 2,127.22. The Sensex index in India increased 48.86 or 0.34% closed to 14,450.35.