Sensex Falls; Weak Financials, Realty Stocks

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

Mumbai benchmark stock index declined 1.6% on mixed earnings and worries that the economy may decelerate faster than estimated. The government is expected to release interim budget in February before the general election in May. The government is expected offer subsidies for interest rate for homes.

[R]10:00AM New York, 7:30 PM Mumbai – Stocks in Mumbai dropped on weak trading. The government is likely to offer subsidized interest rates for home loans.[/R]

In Mumbai, the BSE 30-share index dropped 1.6% or 139.49 to 8,674.35, and the CNX Nifty plunged 1.3% or 35.25 to 2,678.55.

Of the stocks traded on the BSE, 813 shares rose, 1,633 that declined, and 41 were unchanged.

Trading Statistics

Daily turnover on main-board increased to 3,313 crore rupees compared with 3,184.98 crore rupees yesterday.

India’s Foreign Exchange Assets Fall by $2.6 billion in Week to January 16

The Reserve Bank of India reported today in its weekly statistical supplement that the country’s foreign exchange reserves declined $2.6 billion to $252 billion in the week ending January 26.

The bank noted that while foreign currency assets dropped $2.6 billion, the reserves with the IMF declined $11million, taking the total fall in reserves during the week to $ 2.6 billion.

However, the value of gold reserves were unchanged.

Government to Unveil Interim Budget in mid February

India’s parliament said in a statement today the ruling coalition will unveil an interim budget on February 16 ahead of the general elections that are scheduled in April-May.

Analysts forecast that the budget might include some indirect tax changes and is unlikely to contain direct tax proposals.

After the elections, the new government will announce a budget for the fiscal year 2010 once it takes over. The country’s next session of parliament will start on February 12 and end on February 26.

Government Considers Second Stimulus Package for Realty Stocks

Economic Times of India reported that the government is considering a second relief package for the real estate and housing sector that will include lowering the key rate from 9.3% to 7.5% for home loans up to 30 lakh rupees.

Government is also considering doubling income tax rebate on home loan interest to 3 lakh rupees from 1.5 lakh rupees and raising of income tax exemption on rentals from 30% to 50%.

Gainers & Losers

Reliance Industries increased 1.8% to 1,153.15 rupees after it reported yesterday that profit fell by 8.8% 3,501 crore rupees in the third quarter ended December.

Oil & Natural Gas Corporation fell 0.5% to 645.80 rupees on news that the company will sign an agreement with Kazakhstan for a stake in Satpayev oil field in the Caspian Sea tomorrow.

Financial stocks dropped on fears that the worsening environment will increase default. State Bank of India fell 4.3%, HDFC Bank declined 1.3% and ICICI Bank fell 3.7%.

Unitech fell 4.8% on reports it will postpone the sale of its Gurgaon based hotel, The Courtyard, after receiving undervalued quotations from various suitors.

Bharti Airtel shed 0.7% on profit taking after reporting yesterday that third quarter net profit gained 25% from a year ago.

Reliance Communications lost 4.5% the company reported third quarter profit rise of 2.7%.

IT stocks fell. Wipro plummeted 1.7%, Infosys Technologies lost 2.1%, HCL Technologies dropped 4.9% and TCS plunged 2%.

However Satyam Computer Services increased 31.3% to 38.85 rupees on reports the firm might announce a new leadership today.

Tata Motors soared 1.8% on reports the Tata Nano will be supplies to the dealer networks by February 2009 end.

Ranbaxy Laboratories gained 0.8% to 187.50 rupees.

Reliance Infrastructure dipped 0.6% as net profit declined 16.7% to 251.19 crore rupees in the December quarter from the comparable year ago.

United Spirits slipped 15.8% and Everest Kanto Cylinder fell 9.2% after the company reported 48% dip in net profit in the third quarter.

MRF fell 5.8% after the company reported that it realised first quarter net loss of 38.3 crore rupees.

Bharat Electronics increased 0.2% after its net profit rose 9% in the third quarter, while Greaves Cotton shed 0.5% after its net profit fell 73% in second quarter ended December.