Banks Rebound, Inflation Edges Lower

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

Stocks in Mumbai edged higher after banks rebounded. Central banks in six countries in a coordinated move added $180 billion in new liquidity to international credit markets, led by the U.S. Federal Reserve Bank. HDFC, State Bank of India and Kotak Mahindra closed higher. The wholesale price index increased 12.14% for the latest period ending in the first week in September.

[R]10:00AM New York, 7:30 PM - India''s wholesale price index retreats but hovers near the record level. Banks rebound after six largest central banks add liquidity in the international credit markets.[/R]

[Market Sentiment

In Mumbai, the BSE 30-share Sensex gained 0.4% or 52.70 to 13,315.60, and the CNX Nifty rose 0.75% or 29.90 to 4038.15. Of the stocks traded on BSE, 703 rose, 1914 declined and 67 were unchanged.

Trading Statistics

Daily turnover on the Bombay Stock Exchange stood at 7,383 crore rupees from 5,813 crore rupees yesterday.

HDFC Bank rose 3.82% to 1,229.70 rupees on the news that six largest central banks led by the Federal Reserve Bank of the U.S. have added $180 billion of liquidity in the international credit markets.

India''s Wholesale Price Index Rise 12.14%

The wholesale price index increased 12.14% for 52-week period ending on September 6 and the index for the period ending on July 12 was revised upwards to 12.13% from 11.89%.

The wholesale inflation in India has reached nearly 3-decade high last month after crude oil prices rose to a record level in June and food prices escalated. The inflation index has been retreating from the record level but is still hovering near the peak.

Gainers & Losers

Financial stocks rose. State Bank of India gained 1.75% to 1,555 rupees after central banks in the developed world added liquidity to the financial system after banks in the U.S. and Europe avoided lending each other after a dramatic fall of the largest U.S. insurance company AIG.

Finance Minister P Chidambaram said today the government will take more measures to provide liquidity if the cash conditions remain tight.

ICICI Bank gained 3% to 577 rupees after falling in the morning session as brokerage Edelweiss Capital estimated ICICI to post about $200 million in bond losses.

Indian Overseas Bank jumped 7.5% to 110.45 rupees, Bank of Baroda rose 6% to 327.90 rupees, Kotak Mahindra Bank soared 5.36% to 583 rupees, Punjab National Bank advanced 4.72% to 518.70 rupees, and Asia Bank edged up 1.67% to 676 rupees.

Realty stocks dropped. DLF lost 3.60% to 394 rupees, Anant Raj Industries dipped 9.51% to 107 rupees, Indiabulls Real Estate shed 9.5% to 190 rupees, and Housing Development & Infrastructure plummeted 3.7% to 206 rupees.

Reliance Industries rose 3.18% to 1,933.20 rupees and Oil and Natural Gas Corporation increased 2.31% to 1,002 rupees. Ranbaxy Laboratories fell 9.81% to 341.90 rupees and Tata Steel plunged 3.14% to 460 rupees.

Bharti Airtel slid 1.2% to 760.95 rupees.

Unitech declined 4.26% to 122.35 rupees despite the company denied reports that it was involved in a real estate project with the now bankrupted Lehman Brothers.

Bharti Airtel Mulls Expansion

Reuters News reported on its Web site today that it is considering plans to buy a big company outside India. The company earlier failed to acquire MTN Group of South Africa.

Bharti Airtel deputy chief executive of Akhil Gupta said the company is looking at possible acquisitions in emerging markets. Gupta further added that cell phone industry in India can add between 8.5 and 9 million a month and Bharti can sustain between 2.7 and 2.75 million monthly net new additions.