Weak Auto Sales in India, Stocks Fall

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

Stocks in Mumbai fell nearly 3% after exports declined 12% in October. Trade deficit in the month eased but worries of a fall in international trade dragged stocks lower. Vehicle makers fell after November sales declined. Bajaj Auto sales fell 32% and Maruti Suzuki sales plunged 24%.

[R]10:00AM New York, 7:30 PM Mumbai - Indian exports decline 12.1% to $12.82 billion in October.[/R]

Market Sentiment

Indian stocks declined after a government report showed that annual exports fell for the first time in three years.

Trading was volatile following the cabinet reshuffle prompted by last week’s the Mumbai terrorist attacks.

Prime Minister Manmohan Singh took over the finance ministry after P Chidambaram was named the home minister yesterday to replace Shivraj Patil, who resigned after the terrorist attacks planned in Pakistan.

In Mumbai, the BSE 30-share Sensex fell 2.8% or 252.85 to 8,839.87, and the CNX Nifty shed 2.6% or 72.20 to 2,682.90.

Daily turnover on BSE rose to 2,914 crore rupees from 2,396.44 crore rupees on Friday last week.

Trading Statistics

Of the stocks traded on the BSE, 970 rose, 1,160 declined and 65 were unchanged.

India’s Exports Falls, Trade Deficit Falls

India’s exports dropped for the first time in three years, falling 12.1% to $12.82 billion in October from the same period a year ago as demand slowed on declining production and a slowing global economy.

Imports increased 10.6% from a year ago to $23.36 billion in October with oil imports soaring 22% to $7.96 billion.

Trade deficit declined to $10.54 billion in the review period from $10.63 billion in September.

Manufacturing Output Contracts

The ABN AMRO Bank purchasing managers'' index contracted to a seasonally adjusted 45.8 in November from 52.2 in October, dropping for the first time since April 2005.

A reading below 50 signals contraction.

Gainers & Losers

Reliance Industries fell 2% to 1,109.05 rupees on speculation that turbulence on the global financial markets will dampen demand for refined petrochemicals.

Maruti Suzuki India declined 9.4% as vehicle sales slid 24.4% to 52,711 units in November 2008 from the same period a year earlier. Tata Motors declined 2.6% after it planned to raise capital in debt markets.

Bajaj Auto lost 4.3% after total vehicle sales dropped 32% to 1.5 million units in November 2008.

Financial stocks fell on fears of rising defaults. State Bank of India shed 2.8% to 1,055.95 rupees, ICICI Bank plunged 7.2% to 326.05 rupees and HDFC Bank fell 2.3%.

India Infoline rose 2.7% after deciding to buy back its own shares at 43.20 per share, at a premium of 17.2% from the closing price Friday last week.

IT stocks fell despite the rupee weakening to 50.33 per dollar from 50.09 on Friday last week. Wipro declined 3.9% and Tata Consultancy Services rose 1.06%.

Tata Steel rose 1.7% on reports the steel industry will get more help from the government.

Airline stocks were mixed after state-run oil companies slashed Aviation Turbine Fuel prices by 2,480 rupees per kilolitre, from the beginning of this month. Jet Airways fell 1.2%, Kingfisher Airlines was flat at 27.50 rupees, and SpiceJet rose 0.7%.

Hospitality shares were mixed after last week’s Mumbai terror attacks. Indian Hotels Company dropped 0.6% and Oberoi Group jumped 2.1%.

Rajshree Sugars & Chemicals rose 1.21% and Zicom Electronic Security Systems rose 5% to 49.20 rupees.

Arvind Mills increased 1.7% after its board approved demerging its brands and retail business divisions into separate units.

Astra Microwave Products gained 4.4%.