India Trade Deficit Surges; Weak Rupee

123jump.com Staff
01 Oct, 2008
New York City

Sensex in Mumbai trading gained on hopes that the U.S. will pass its bailout plan. Trade deficit for the first five months surged 44% on crude oil import bill rise of 77%. The sharp rise in oil prices lifted the trade deficit to $49 billion in the period. Software exporters gained on weak rupee.

[R]10:00AM New York, 7:30 PM Mumbai – India trade deficit surges 44% in five months period on rising oil imports.[/R]

Market Sentiment

In Mumbai, the BSE 30-share Sensex rose 1.52% or 195.24 to 13,055.67, and the CNX Nifty gained 0.75% or 29.55 points to 3,950.75. Financial markets will be closed on the account of Mahatma Gandhi birth day celebration.

Of the stocks traded on BSE, 1476 rose, 1123 declined, and 73 were unchanged.

Trading Statistics

Daily turnover on BSE stood at 4,315 crore rupees from 5,179.86 crore rupees. IT stocks jumped as the rupee fell against the dollar.

Trade Deficit Soars 44%

The Indian government department of commerce reported that the country''s exports gained 26.9% to $16 billion in August from the same period a year ago and rose 33.5% to 68,721 crore rupees.

In the five months period between April and August in fiscal 2009 the total exports increased 35% to $81 billion from $60 billion and imports surged to $130 billion from $94 billion over the comparable period a year ago. In rupee terms exports in the period increased 39% to 550,123 crore rupees from 387,791 crore rupees.

Crude oil import in August surged 77% to $10.6 billion from $6.2 billion and in the five months period ending in August rose 59.6% to $45.96 billion from $28.8 billion.

On the overall, the trade deficit in the period widened nearly 44% to $49 billion from $34 billion last year.

Gainers & Losers

Reliance Industries fell 2.01% to 1,907.25 rupees.

IT stocks declined as the rupee slumped to a five year low against the dollar. However, the rupee rebounded 0.8% to 46.63 against the dollar at close but hovers near five year low.

Satyam Computer Services surged 7.47% to 318.75 rupees, Infosys soared 4.03% to 1,453.90 rupees, Wipro increased 2.78% to 349.10 rupees, Tata Consultancy Services advanced 1.24% to 671 rupees.

Financial stocks rose on the hopes that that the U.S. will pass its bailout plan for banks and brokerage firms. HDFC Bank rose 5.26% to 1,293.65 rupees, ICICI Bank jumped 3.1% to 551.45 rupees and State Bank of India spiked 2.44% to 1,501.45 rupees.

Jaiprakash Associates edged up 7.02% to 118.90 rupees, Tata Power Company gained 4.46% to 946.50 rupees, Grasim Industries soared 4.63% to 1,765.70 rupees.

DLF slumped 2.03% to 345.25 rupees, Tata Motors shed 1.44% to 339.25 rupees, Reliance Infrastructure lost 1.11% to 781.50 rupees.

Mahindra & Mahindra fell 0.53% to 506.55 rupees on news that the company has created a trust that will hold 8.7% equity after the merger of its two subsidiaries - Punjab Tractors and Mahindra Holding Finance – with the parent company.

Maruti Suzuki India gained 1.54% to 697.70 rupees after it reported that year-on-year sales rose 5.3% to 71,000 units in September.

Samsung Targets 15% Market Share

Samsung Electronics head of operations in India Sunil Dutt announced today that the company plans to increase its share of India''s mobile handset market to 15% by mid next year from the current share of 9%.

The company will add five new models in India by the end of the year