Sensex Rises 3%, Reliance Petroleum Exports

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

Foreign direct investment in India tumbled as investors pulled capital around from the emerging markets. Stocks in Mumbai rose after the U.S. offered emergency funding to Bank of America. Larsen & Toubro entered in agreement with Westinghouse to build nuclear plant. Reliance to begin petrol exports.

[R]10:00AM New York, 7:30 PM Mumbai - India’s FDI tumbles 42% to $1 billion in November.[/R]

Indian stocks rose after the U.S. government bailed out troubled Bank of America, raising hopes that the U.S. will intervene to prevent the recession from deepening.

In Mumbai, the BSE 30-share Sensex gained 3.1% or 276.85 to 9,323.59, and the CNX Nifty jumped 3.4% or 91.75 to 2828.45.

Of the stocks traded on the BSE, 1,247 rose, 1,175 declined, and 91 were unchanged.

Trading Statistics

Daily turnover on BSE increased to 2,930 crore rupees from 2,904.93 crore rupees yesterday.

U.S. Bails Out Bank of America

The U.S. Treasury Department, the U.S. Federal Reserve and Federal Deposit Insurance Corp. will provide troubled Bank of America with $20 billion fresh capital from the Troubled Asset Relief Program in exchange for preferred stocks.

U.S. will also share loses for the toxic assets that were inherited after the $19.4 billion purchase of Merrill Lynch.

Bank of America reported in its fourth quarter financial results today that it issued 455 million common shares for $15 billion of preferred stocks issued to the U.S. Treasury Department.

In January 2009 a further $10 billion of preferred stock- part of the $25 billion assigned to the U.S. department of treasury as part of the Troubled Assets Relief Program.

In addition, the company issued $1.4 billion shares of common stock related to the acquisition of Merrill Lynch.

FDI to India Falls 42%

The Economic Times of India reported today that foreign direct investment into the country fell 26% from a month ago and 42% from a year earlier to $1 billion in November as the global credit crunch took its toll.

Inflows since April soared to $23 billion. Foreign direct investment in the current fiscal year is expected to reach $35 billion.

Gainers & Losers

Tata Power rose 5.1%, Reliance Infrastructure gained 7.3%, and ITC edged up 2.2%.

Maruti Suzuki India fell 1.3% and Grasim dropped 0.3%. NTPC jumped 7.5% to 176.90 rupees.

Reliance Industries climbed 6.8% to 1,220.65 rupees after reporting that Reliance Petroleum will begin fuel exports from its new refinery this month.

Oil and Natural Gas Corporation dropped 3.7% to 648.20 rupees on reports it will invest $5.3 billion in developing gas finds in two of its eastern offshore Krishna Godavari basin blocks to produce 25 million standard cubic meters of natural gas per day of gas by 2013.

State run oil marketing firms rose as crude oil prices fell to $35 per barrel. HPCL edged up 2.8%, BPCL gained 1.9%, and IOC rose 2.1%.

Telecommunication stocks increased on bargain hunting. Bharti Airtel jumped 4.6% to 632 rupees and Reliance Communications climbed 4.2% to 181.55 rupees.

TCS fell 1.5% to 502.50 rupees after reporting that market conditions were challenging, but Wipro rose 1.6% to 238.95 rupees and Infosys Technologies increased 1.3% to 1,268 rupees.

Satyam Computer Services rallied 21.2% to 24.75 rupees after new board member said Deepak Parekh said the company can collect on time the 1,700 crore rupees in receivables and may not need financial help from the government.

HCL Technologies gained 8.24% to 118.25 rupees ahead of its second quarter results on January 23, 2009.

Financial stocks rose on speculation that Reserve Bank of India will cut interest rate as the inflation rate slows. ICICI Bank gained 2.8%, HDFC Bank advanced 1.7%, and State Bank of India increased 1.6%.

Larsen & Toubro rose 1.5% to 715.10 rupees after the company entered into a deal with Westinghouse Electric for 1,000 megawatt nuclear reactors in India.

Bharat Heavy Electric jumped 3.1% to 1,395 rupees.

Commodity stocks gained on rising copper prices. Tata Steel edged up 2.5% to 202.75 rupees, Hindalco jumped 4.2% to 50.25 rupees, and Sterlite Industries soared 2.3% to 259.55 rupees.

Carmakers increased on expectations of low interest rates. Mahindra & Mahindra rose 0.5% to 320.50 rupees, Tata Motors increased 0.5% to 151.90 rupees and Bajaj Auto jumped 7.7% to 472 rupees.

Ranbaxy Laboratories rallied 0.1% to 216.15 rupees on news that the company is considering exiting its Japanese joint venture - Nihon by Pharmaceuticals Industry (NPI) by selling 50% stake after the Indian drug maker was acquired by Japanese drug major Daiichi Sankyo.

Realty stocks tumbled on concern over corporate governance issues. Mahindra Lifestyle declined 4.3%, Indiabulls Real Estate plunged 3.3%, and Unitech fell 5.6%.