sensex Drops, Production Rises, Inflation High

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

July industrial production in India rose 7.1% from June production when I increased at 5.4%. Volatile capital goods production in the month surged 21.9% from 12.3% increase in June. Manufacturing accounting for 80% of total rose 7.5% in the month, mining output increased 5% and electricity generation increased 4.5%.

[R]10:00AM New York, 7:30PM Mumbai - India’s wholesale price index eases but remains at elevated level. Industrial production rises 7.1% in July.[/R]

Market Sentiment

Stocks in Mumbai fell on profit taking despite wholesale price index-based inflation eased to 12.10% in the week ended August 30 from 12.34% at the end of the previous week annual period.

The BSE 30-share Sensex dropped 2.26% or 323.48 to 14,000.81, and the CNX Nifty slipped 1.44% or 61.85 to 4,228.45. Of the BSE stocks 818 advanced, 1,848 declined, and 74 were unchanged.

Trading Statistics

Daily turnover on BSE stood at 5,078 crore rupees from 4,798.08 rupees yesterday. Infosys and Reliance Infrastructure fell more than 6%.

Industrial Output Rises, Inflation Eases

The Indian government reported today that industrial production soared 7.1% in July from the same period a year earlier. Manufacturing output advanced 7.5% in the same month. Economists were looking for a production increase of 6.5%.

July industrial production in India rose 7.1% from June production when I increased at 5.4%. Volatile capital goods production in the month surged 21.9% from 12.3% increase in June. Industrial production includes output of manufacturing, mining and power sectors. Manufacturing accounting for 80% of total rose 7.5% in the month, mining output increased 5% and electricity generation increased 4.5%.

In addition, the wholesale price index-based inflation rose 12.10% in the week ended 30 August 2008, below the previous week''s annual rise of 12.34%. The annualized inflation rate was 3.72% during the corresponding week of the previous year.

Government Considers Trade in Wheat and Rice Futures

India is considering allowing futures trade in wheat, rice and soy oil and other commodities by the end of November. The country has banned futures trading in several commodities and stopped exports of wheat and corn to ensure reliable and consistent supplies.

B.C. Khatua, chairman of the Forward Markets Commission, said output of summer-sown crops and the progress of the next crop could be gauged by the authorities by November.

“I do hope all commodities that have been banned will be available for trading,"" said Khatua, who had ordered the ban on futures in some commodities after consulting the government. Last week, the government lifted exports of a premium grade rice.

Gainers & Losers

Reliance Industries declined 3.31% to 1,931.40 rupees.

Bharat Heavy Electricals rose 1.92% to 1,696.75 rupees after the industrial production report showed capital goods production increased 21.9% in July. Larsen & Toubro fell 1.04% to 2,637.40 rupees.

Bharti Airtel rose 0.32% to 778.70 rupees after the company added 2.7 million users in the month of August 2008 taking its total subscriber base to 74.8 million.

IT stocks declined. Infosys slipped 6% to 1,644.10 rupees, Satyam Computer Services fell 3.47% to 406.55 rupees, Wipro slumped 1.67% to 419.75 rupees, Tata Consultancy Services dropped 3.34% to 808.15 rupees.

Maruti Suzuki India increased 3.61% to 703.70 rupees, Hindustan Unilever gained 0.83% to 248.90 rupees and NTPC edged up 0.12% to 173.63 rupees.

Mahindra & Mahindra plummeted 2.13% to 551.30 rupees after the company said it will transfer the logistics business to Mahindra Logistics for 32 crore rupees. Reliance Infrastructure declined 6.32% to 929.30 rupees.

ICICI Bank shed 4.89% to 652.85 rupees, HDFC lost 3.84% to 2,179.10 rupees and DFL slipped 3.64% to 467.90 rupees.