Mumbai Stocks Await Earnings

123jump.com Staff
06 Jan, 2009
New York City

Mumbai stocks traded mix ahead of earnings season and the expectations of more rate cuts. More rate cuts are likely in the next three months if the economy remains weak. Axis Bank and Infosys will kick start the earnings season at the end of this week.

[R]10:00AM New York, 7:30 PM Mumbai - Sensex rises 0.6%, Nifty drops 0.3%.[/R]

Indian market averages were mixed, with the Sensex rising 0.6% on expectations that the fiscal and monetary policy interventions will help the economy.

Axis Bank starts the reporting season for Q3 results on January 9 followed by Infosys Technologies on January 13.

In Mumbai trading, the BSE 30-share Sensex Index rose 0.6% or 60.33 to 10,335.93, and CNX Nifty fell 0.3% or 8.65 to 3,112.80.

Of the stocks traded on the BSE, 1,244 stocks rose, 1,271 declined, and 91 were unchanged.

Trading Statistics

Daily turnover on the BSE increased to 4,685 crore rupees from 4,188.28 rupees yesterday.

Port Profit Jumps 160% Over Three Years

India''s union shipping and transport minister T R Baalu said the government''s profit rose to 2,809.69 crore rupees from its 12 major ports during 2007 to 2008 period.

Baalu said profits from Chennai port alone rose 271.9% to 431.26 crore rupees during 2007-2008 from 115.95 crore rupees during 2004-2005, while profits from Tuticorin port rose to 115.3 crore rupees during 2007-2008 from 69.19 crore rupees during 2004-2005.

Profits have risen 159.9% over the past three years.

According to the report, the 12 major ports across the country handled 519,314 million tons compared to 383,746 million tons, an increase of 35.33%.

India Has Scope For Further Rate Cuts

Economic Times of India reported that India can cut interest rates by another 150 basis points by mid-2009 but is unlikely to seek zero rates.

Reserve Bank of India cut interest rates on Friday last week to 5.5%, eight year low.

A senior fellow at think tank at the National Institute of Public Finance and Policy Ila Patnaik said RBI must follow Japan and the Federal Reserve in lowering its rates to near zero.

Patnaik projects that wholesale prices fell steeply in the final quarter of 2008, making Reserve Bank rates way too high.

“First, there is a case for RBI to cut rates even further. RBI can go all the way to a zero short-term interest rate, as some other central banks have done,” Patnaik is quoted as saying.

Gainers & Losers

Reliance Industries edged up 0.2% to 1,368.05 rupees after its unit Reliance Petroleum started processing crude at its 580,000 barrels a day refinery on December 25, 2008.

Telecom stocks fell on concern profit margins will drop on rising competition. Reliance Communication fell 5.7% and Bharti Airtel dropped 4.2%.

Steel stocks gained after the government last week withdrew exemptions from countervailing duty on steel bars, used in construction activity.

Tata steel rallied 0.7% after signing an agreement with Northern Iron of Australia for supply of iron ore concentrates to its UK unit Corus.

Hindustan Zinc rose 9.3% after the last week withdrew exemption from basic customs duty on zinc.

Financial stocks increased. ICICI Bank rose 4.7% and HDFC Bank edged up 5.5%. However, State Bank of India fell 2.7%.

IT stocks tumbled on worries a weakening global economy will reduce demand. Tata Consultancy Services fell 1.4% and Wipro tumbled 1.2%, Infosys tumbled 0.6% to 1,167.65 rupees.

Satyam Computer Services advanced 7.3% after denying reports that Tech Mahindra was considering an all-share merger deal with the company.

Grasim Industries climbed 8.4% and UltraTech Cement rose 11.8%. Larsen & Toubro fell 0.7%.

Maytas Infra rallied 4.3% after the received a construction order worth 110 crore rupees from the Southern Railways.

Bharati Shipyard surged 5.4% after the founder of Great Offshore pledged another 2.15% of the company to Advitiya Urja, a wholly-owned subsidiary of Bharati Shipyard.

BGR Energy Systems increased 10.6% after the company raised 2,105 crore rupees of loan for its working capital requirements from a consortium of five banks.