Nuclear Deal Hurdles, Stocks Fall

123jump.com Staff
05 Sep, 2008
New York City

Stocks in Mumbai dropped sharply as new information emerged on nuclear deal with the U.S. The Bush administration has conditioned that the supply of the nuclear material will halt if India lifted its moratorium on nuclear tests. The condition violated sovereign right of India to test and BJP and other opposition parties immediately demanded resignation of the prime minister. Financial, realty and telecom stocks fell as weak closing of the global markets dragged the index 2.8% lower.

[R]10:00AM New York, 7:30 PM Mumbai – Stock benchmark indexes fell after BJP demanded meeting of parliament members to investigate new revelations of nuclear test moratorium as a condition for nuclear supply.[/R]

Market Sentiment

Stocks in India fell on a sell off sparked by weak global cues and rising political tensions between the opposition and the ruling party over the ongoing nuclear deal negotiations.

In Mumbai, the BSE-30 share Sensex declined 2.79% or 415.27 to 14,483.83 and CNX Nifty dropped 2.15% or 95.45 to 4352.30. Of the stocks traded on the BSE 1,017 rose, 1613 fell, and 86 were unchanged.

Trading Statistics]

Daily turnover on BSE stood at 4,790 crore rupees compared with 5,485.53 crore rupees yesterday.

Information Technology and realty stocks led decliners. Ranbaxy Laboratories fell 9.20% to 448.15 rupees after Daiichi Sankyo’s offer to acquire an additional 20% stake in the company to 737 rupees per share ended yesterday.

Inflation at 12.34%

The Indian government reported yesterday that the country’s annual inflation rate eased to 12.34% in the year ending August 23, 2008 compared with 12.40% at the end of the previous week. Although fuel prices remained unchanged, vegetable prices edged lower.

Political Tensions Rise

BJP leader Yashwant Sinha said that parliament must convene to investigate Prime Minister Manmohan Singh over the breach of privilege for lying on the nuclear deal issue The release of a 26-page document from the U.S. House Foreign Affairs Committee showed that India has agreed to moratorium on nuclear testing.

The Nuclear Suppliers Group, a cartel of nuclear material suppliers, where 45 countries are members and decisions are taken on a consensus basis demanded that if India stops its nuclear test moratorium then the supplies of nuclear materials should be automatically cut off. The six countries, New Zealand, Ireland, Norway, the Netherlands and Switzerland are demanding this condition for the approval of the mediated contract between the U.S. and India.

India to Import 15 million Tonnes of Coal

Reuters News reported on its Web site today that India plans to import 15 million tons of coal for the thermal coal plants in the year ending March 2009. Secretary at the power ministry said the country was unable to use 2% of its installed generation capacity because of coal shortages.

Gainers & Losers

Automakers rose. Tata Motors shed 1.84% to 420.90 rupees after representatives of West Bengal government and Trinamool Congress chief Mamata Banerjee met today to try and solve the land dispute at Singur.

Maruti Suzuki India fell 0.28% to 682 rupees and Mahindra & Mahindra lost 0.39% to 584.05 rupees.

IT stocks fell. Infosys slipped 4.42% to 1710.50 rupees, Wipro edged down 4.37% to 428.50 rupees, TCS slipped 0.55% to 839.50 rupees, and Satyam Computer Services slumped 3.55% to 417.50 rupees.

Telecommunication stocks also fell. Bharti Airtel tumbled 3.10% to 801 rupees, Reliance Communications dropped 1.20% to 392.70 rupees.

Real estate stocks declined. DLF fell 5.60% to 493.50 rupees, Unitech slid 4.93% to 157 rupees, Indiabulls Real Estate shed 3.06% to 280.50 rupees, Parsvnath Developers dipped 0.77% to 122.50 rupees, and Akruti City tumbled 6.77% to 897 rupees.

Steel stocks also fell as steel prices were slashed by 2,000 rupees per ton in the spot market with effect from September 1 2008. Tata Steel dropped 3.74% to 560.55 rupees, JSW Steel climbed down 3.55% to 705 rupees, Ispat Industries declined 1.02% to 24.35 rupees, and Jindal Steel & Power lost 5.06% to 1800.15 rupees.

Bharat Heavy Electricals declined 2.28% to 1,725 rupees on news that the company will sign a pact over the weekend to form a venture for a forging foundry with Heavy Engineering Corporation, Ranchi.

Financial stocks plummeted on weaker global cues. ICICI Bank declined 4.21% to 688 rupees, State Bank of India plunged 0.99% to 1520 rupees, and HDFC Bank slid 4.43% to 1246.20 rupees.

Tata Power Company fell 1.39% to 1072.90 rupees after it purchased a 11.4% stake in Australia’s Geodynamics for 165 crore rupees.

Hindustan Unilever gained 1.62% to 244.75 rupees.

Hindustan Petroleum Corporation soared 5.17% to 238.05 rupees, Bharat Petroleum Corporation increased 8.76% to 358.25 rupees and Indian Oil Corporation spiked 1.80% to 444.40 rupees.