Sensex Falls, Thomas Cook Surges

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

Indian stocks fell despite the expectations of lower inflation in the next fiscal year. Tighter monetary policy from the Reserve Bank of India is expected to bring inflation under control. Financial and realtors fell in the trading session. Airlines declined as oil price in the region rose. FirstSource Solution rose 9% after ICICI Bank and two other shareholders sold their combined stake in the outsourcing company.

[R]10:00AM New York, 7:30 PM Mumbai - India’s annual inflation forecasted to ease to between 5% and 6% in the next year.
[/R]

Market Sentiment

In Mumbai, the BSE 30-share Sensex declined 1.28% or 185.43 to 14296.79, and the CNX Nifty dropped 1.05% or 45.40 to 4292.10. Of the stocks traded on BSE, 1033 rose, 1576 declined, and 100 were unchanged.

Trading Statistics

Daily turnover on BSE stood at 3,419 crore rupees compared with 3,789.90 crore rupees yesterday. Jaiprakash Associates rose 0.03% to 156.90 rupees and Grasim rose 0.03% to 1957 rupees.

India’s Annual Inflation to Fall to 6%

Reuters News reported on its Web site today that the chief economic adviser of the finance minister in India Arvind Virmani said annual inflation rate is likely to drop to between 5% and 6% in the next year on tight monetary by the central bank. Virmani also suggested that slowing crude oil prices will also ease pressure on inflation rate.

Gainers & Losers

Financial stocks fell on concern that the Reserve Bank of India will tighten its monetary policy in order to put a lid on the rising inflation rate. HDFC Bank slid 1.23% to 1,240 rupees, ICICI Bank fell 2.74% to 648.60 rupees, and State Bank of India plummeted 3.02% to 1,330 rupees.

Realty stocks fell. Unitech shed 2% to 156.80 rupees, Indiabulls Real Estate slipped 8.37% to 262.25 rupees, Parsvnath Developers plunged 1.58% to 112.20 rupees, and Phoenix Mills tumbled 1.74% to 180.55 rupees.

Automakers also fell on similar concerns. Mahindra & Mahindra climbed down 0.20% to 573.10 rupees, Tata Motors slipped 2.19% to 423.85 rupees, and Maruti Suzuki India plunged 0.44% to 629.45 rupees.

Airlines were negatively impacted by soaring crude oil prices which increased to around $117 per barrel on concern tropical storm Gustav will enter the Gulf of Mexico. Jet Airways fell 2.35% to 452.35 rupees, Deccan Aviation declined 2.33% to 79.50 rupees, and SpiceJet edged down 1.76% to 25.15 rupees.

SpiceJet is considering increasing its fares ahead of the peak travel season in September to October.

Commodity stocks however advanced. Hindalco Industries gained 2.47% to 139.05 rupees and Tata Steel rose 0.86% to 582.50 rupees.

Oil & Natural Gas Corporation fell 0.83% to 1007.05 rupees after British oil and gas explorer Imperial Energy said yesterday it has agreed to a takeover from ONGC worth £1.4 billion.

DLF dropped 3.65% to 479.85 rupees and Reliance Industries declined 1.53% to 2,146.20 rupees on news that the company is planning to transfer 80% of its participatory interest in the D6 block in the Krishna Godavari basin to four unlisted subsidiaries.

Infosys Technologies gained 0.67% to 1709 rupees on plans to acquire UK based SAP consulting company Axon Group plc, for £407.1 million, but other IT stocks fell. Satyam Computer Services dipped 0.27% to 405 rupees, Wipro fell 0.56% to 426.05 rupees, and TCS plunged 1.72% to 818 rupees.

Tech Mahindra slipped 1.51% to 773 rupees on news BT group is planning to sell its 31% stake in the firm.

FirstSource Solutions fell 8.78% to 44.15 rupees on reports ICICI Bank and two other major shareholders of the company are selling their combined 68% in the firm at 64 rupees a share. Bajaj Auto climbed 5.80% to 579.95 rupees.

Thomas Cook India rose 14.80% to 98.50 rupees after its board get a nod to plans for raising 200 crore rupees through equity rights issue.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 25.75 or 0.20% to 12,752.96, , Hang Seng index in Hong Kong increased 408.06 or 1.94% closed to 21,464.72.ASX 200 index in Australia increased 3.70 or 0.07% to close 5,011.20. The KL Composite index in Malaysia decreased 2.85 or 0.27% closed to 1,067.65.

The Kospi Index in South Korea increased 3.67 or 0.25% to close at 1,493.92, SET index in Thailand closed higher 7.07 or 1.06% to 675.99 and JSE Index in Indonesia increased 23.52 or 1.12% to 2,131.06. The Sensex index in India decreased 185.43 or 1.28% closed to 14,296.79.