FDI Falls in India, Portfolio Investment Rises

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

Mumbai trading sentiment was lifted on a rise in foreign investment in financial markets. December month investment rose to 2,181 crore rupees. Foreign direct investment in October dropped 26% but is still expected to reach $35 billion according to the commerce minister Nath.

[R]10:00AM New York, 7:30 PM Mumbai - Indian foreign direct investment drops 26% in October but investment in financial markets rose in December.[/R]

Market Sentiment

Indian stocks surged to end higher in afternoon trading on expectations that the U.S. Federal Reserve will cut its interest rates to near zero to avoid a deepening recession.

Investor sentiment was also boosted by news that foreign funds purchased a net 239.40 crore rupees on Monday and a total of 2,181.70 crore rupees in December.

In Mumbai, the BSE 30-share Sensex rose 1.5% or 144.59 to 9,976.98, and the CNX Nifty soared 2% or 60.55 to 3,041.75.

Of the stocks traded on the BSE, 1,866 rose, 648 declined, and 67 were unchanged.

Trading Statistics

Daily turnover on the BSE declined to 4,129 crore rupees from 4,381.42 crore rupees yesterday.

Foreign Direct Investment Falls 26% in October

Economic Times of India reported today that commerce minister Kamal Nath said in a letter to parliament that foreign direct investment declined 26% in October from a year earlier.

FDI inflows in the April-October period stood at $18.7 billion.

According to the report, Nath said FDI inflows are estimate to be $35 billion in the current fiscal year ending in March 2009.

Minister Nath said, “Government has announced a slew of measures to accelerate the demand in the economy which would enable India to continue as an attractive investment destination.”

Excise Duty Receipts Drop 15% in November

Separately the ET online edition said the finance ministry noted that excise duty receipts declined 15% to 85.56 billion rupees in November from a year ago.

Customs duty collections dropped 0.8% in November to 89.31 billion rupees.

Gainers & Losers

Reliance Industries rose 3.6% to 1,386.60 rupees.

ONGC gained 6.1% after UK-listed Imperial Energy reported that its agreed takeover by ONGC was not at risk because Lehman Brothers held 0.01% of Imperial''s share capital.

Financial stocks rose on expectations of interest rate cuts by the Reserve Bank of India.

HDFC Bank rose 4.1% after as its advance tax payment fell 10.7% to 250 crore rupees in the third quarter to December 2008 from the same period a year ago.

State Bank of India increased 2.8% on reports its advance tax payment rose 56% to 1,700 crore rupees in the three months to December 2008 from the comparable year ago period.

HDFC fell 4.1% on concerns that reduction of home loan rates will reduce its margins.

HDFC''s advance tax payment increased 29.8% to 279 crore rupees in the quarter to December from a year ago.

LKP Finance gained 4.9% to 63 rupees after its board approved buyback of shares at a 42.86% premium over the ruling market price.

IT stocks increased after HCL Technologies said it signed contracts worth $1 billion in the October-December period, leveraged by the company''s acquisition of U.K. firm Axon.

Rupee rose to 47.81 from 48.05 yesterday.

Tata Consultancy Services rose 2.4%, Infosys increased 2%, Wipro rose 2% and Satyam Computer Services soared 0.5%.

Automakers were mixed. Maruti Suzuki India fell 0.1% and Mahindra & Mahindra shed 1% as its advance tax payment fell 93.3% to 4 crore rupees in the three months to December from the same period a year earlier.

Bosch fell 0.8% after announcing a temporary closure of its Naganathapura, Karnataka plant.

Larsen and Toubro fell 1.2% to 810.30 rupees.

Compact Disc India soared 9.3% on its plan to diversify into gaming and publishing business.

GMR Infrastructure increased 3.5% on reports the company is close to buying an Indonesian coal mine firm for $80 million.

SRF rose 8.5% on its decision to acquire the engineering plastic business and industrial yarn business of promoter SRF Polymers for 151.60 crore rupees.