Weak Rupee, Sensex Falls

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

Stocks in Mumbai fell after crude oil futures rose and rupee fell against the dollar. Reliance Industries began its oil production from deep water wells near Gujarat State Investors fear that ongoing dispute on its sale price may drag beyond its peak production in February 2009.

[R]6:00PM Mumbai, India – Rising oil prices and worries related to software exporters dragged market index lower.[/R]

Stocks in Mumbai trading fell after markets in the region traded higher on the optimism that the U.S. bailout plan of $700 billion will improve liquidity in the global credit markets. Crude oil surge dampened market optimism.

Sensex index on the BSE dropped 47.36 or 0.3% to 13,994.96 and CNX Nifty index on the National Stock Exchange declined 22.20 or 0.5% to 4,223.05.

Reliance Industries dropped 0.72% to 2,037 rupees after investors worried that if the current dispute between the oil and gas company with Reliance Natural Resources and NTPC Limited takes longer than expected. The management expects the natural gas and oil production to reach its peak by the end of February. The company began its commercial crude oil production on Sept 17 and expects to reach peak production as it opens more deep water wells in the Krishna Godavari region.

Any delay of a verdict will lower the earnings in the current and the next quarter. Reliance Industries has 15% market weight in the BSE Sensex index.

Hindalco Industries fell 2.7% to 109 rupees after it commenced its rights offering. The company offered to sell existing share holders three shares at 96 rupees a share for every seven shares held and will close the offering on October 10. The capital raised will be used to repay a bridge loan to fund the purchase of Canada based Novelis with the revenue of 11.2 billion in the fiscal 2008.

Tata Steel gained 2.95% to 493.75 after its international subsidiary took a stake of 7.3% stake in a company that has an interest in coking coal mines in Mozambique.

Software exporters fell after U.S. financial services sector continue show weakness. Satyam Computer dropped 4.7% to 352.75 rupees, Wipro declined 0.6% to 414 rupees but Infosys Technologies edged 0.25% higher to 1,627.85 rupees.

Larsen & Toubro dropped 2.6% to 2,576 rupees after it reported to sell at least four subsidiaries that are struggling with revenue growth.

Tulip Telecom surged 14% to 1,053 rupees after it received a wide area network project of 95 crore rupees in Madhya Pradesh.