Sensex Drops; Rupee Gains, Satyam Saga

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

Mumbai stocks fell on low trading volume along with weak trading in Asia. Rupee gained against the dollar. Telecom sector was the active in the year with a deal total of $9 billion. Tata Motors fell 7% after UK based Jaguar and Land Rover will need additional $1 billion of capital.

[R]10:00AM New York, 7:30 PM Mumbai – Stocks in Mumbai drop as global markets decline. Mergers & acquisition activities in telecom sector generated $9 billion in deals in the year.[/R]

Indian stocks extended losses on worries that the global economic recession is deepening.

In Mumbai, the BSE 30-share Sensex index fell 1.2% or 118.03 to 9,568.72, and the CNX Nifty declined 1.7% or 51.80 to 2,916.85.

Daily turnover on BSE declined to 3,176 crore rupees from 3,378.03 crore rupees yesterday.

Trading Statistics

Of the stocks traded on the BSE, 930 rose, 1,535 declined, and 93 were unchanged.

Mergers & Acquisitions Soar in Telecom Sector

Economic Times of India reported today that according to an Assocham EcoPulse study mergers and acquisitions rose to $9 billion in 2008 despite the slowdown in the global economy.

One of the biggest deals involved NTT DoCoMo buying a 26% stake in Tata Teleservices for $2.7 billion deal. Also Dubai-based Emirates Telecommunications Corp (Etisalat) bought 45% equity in Swan Telecom in cash for $900 million.

Travel Insurance Premium Rises 10% for Foreign Tourists

The online report also said premium for foreign tourists has increased by 10% after the recent Mumbai terrorist attacks, with visitors from US, UK, France and Australia likely to pay higher premium for the mandatory travel insurance cover when they travel to the country.

According to the report, chief executive of Carlson Wagonlit Praveen Gandhi said, “The travel insurance premium for corporate travel is fixed on an annual basis. It may rise significantly in the beginning of 2009, when they are renegotiated.”

Gainers & Losers

Reliance Industries fell 1.5% to 1,241.20 rupees on worries that falling oil prices will drag operating margins.

ONGC fell 2.7% after oil traded below $37 per barrel on speculation that U.S. supplies increased for the third week.

Mahindra Ugine Steel Company declined 4.7% after the company reduced the number of shifts and days of work. Mahindra & Mahindra plunged 2.1% and Maruti Suzuki India shed 4.1%.

Tata Motors fell 8.7% on news that it might inject $1 billion to resuscitate its newly acquired brands- Jaguar and Land Rover.

Financial stocks increased on the expectations that lower interest rates will improve profitability. State Bank of India gained 1.8%, ICICI Bank increased 3.3% and HDFC Bank gained 0.7%.

Housing Development Finance Corporation dropped 1%.

IT stocks declined as the rupee strengthened to 48.25 against the dollar from 48.78 yesterday. Wipro slid 4.3% to 232.40 rupees and recently it agreed to buy Citi Technology Services for $127 million in cash.

Infosys edged 0.4% lower and Tata Consultancy Services dropped 4.5%.

Satyam Computer declined 3.8% after falling nearly 14% after the World Bank banned the company for eight years for illegal business practices and allegation of data theft.

Bharat Heavy Electricals fell 0.9% despite winning two contracts worth 2,100 crore rupees from state-run utility NTPC.

Deep Industries increased 7% and Fortis Healthcare edged up 2.4% after its board approved raising capital through stocks and warrants.

Aurobindo Pharma gained 3% after receiving regulatory approval from Canada to sell terbinafine hydrochloride tablets in multiple strengths.

ABG Infralogistics surged 15.4% on reports a French company will purchase a 49% stake in its bulk port handling business. Era Infra Engineering increased 0.3% after receiving a order worth 9.62 crore rupees. PBA Infrastructure jumped 4.6% after receiving two orders worth 47.96 crore rupees.