Sensex Drops 4%, Weak Rupee

123jump.com Staff
02 Feb, 2009
New York City

Stocks in Mumbai fell after 8% surge in January. The benchmark index Sensex dropped 3.8%. Investors focused on weak exports and falling foreign exchange reserves. Rupee weakened again flirted near record low against dollar. DLF plunged 14% on 69% fall in earnings. M&M net dropped 93%.

[R]10:00AM New York, 7:30 PM Mumbai – Stocks in Mumbai fell after 8% surge in January. Investors focused on weak exports and falling foreign exchange reserves. Rupee weakened again flirted near record low against dollar.[/R]

Indian stocks plunged 3.8% on bouts of profit taking as investors locked in gains after the 8% surge in stocks in the week ending January 31 last week.

Investors were also spooked by news that the U.S. economy fell the most in 27 years, dropping 3.8% in the fourth quarter ended December.

In Mumbai, the BSE 30-share Sensex Index fell 3.8% or 357.54 to 9,066.70, and the CNX Nifty dropped 3.8% or 108.15 to 2,766.65.

Of the stocks traded on the BSE 884 rose, 1,600 declined, and 62 were unchanged.

Trading Statistics

Daily turnover on the BSE declined to 3,020 crore rupees from 3,606.30 crore rupees on Friday last week.

Exports Falls 1.1% to $12.7 billion in December

India’s commerce department said today the country’s exports dropped 1.1% to $12.7 billion in December from a decline 9.9% in November driven by pharmaceuticals, engineering products and some agricultural commodities.

However, exports of jewelry and gems fell 21%, textiles 13% and handicraft and handloom exports plunged 64% in the review period.

Imports rose 8.8% to $20.25 billion, as non-oil imports plummeted 31.9%.

The cumulative value of exports in the April-December 2008 period rose 17.1% from a year ago to $131.99 billion.

Manufacturing Activity Eases to 46.7 in January

ABN AMRO Bank reported today that ABN AMRO purchasing managers’ index PMI, which is based on a survey of 500 companies, increased to 46.7 in January from 44.4 in November after adjusting for seasonality.

A reading below 50 signals contraction, while a reading above 50 shows expansion.

According to the report, the eight-day nationwide strike by truck drivers dented affected the manufacturing sector.

Senior economist at ABN Amro Gaurav Kapur said, “The details of the PMI survey suggest that the outlook for the sector remains worrisome. The key forward looking activity index of new orders remains in contractionary mode with export orders having now declined for the fourth consecutive month. Survey details point towards slowing growth and rapidly easing inflationary pressures. This combination will provide headroom for the RBI to cut policy rates further over the next couple of months.”

Gainers & Losers

Reliance Industries declined 3.6% to 1,277.55 rupees.

DLF dropped 13.5% after its net profit plunged 69% to 670.79 crore rupees in the third quarter ended December.

Unitech fell 9% after it reported that net income dipped 74.1% in the December quarter from the comparable year ago period.

State Bank of India fell 4.9% on news that company will reduce its home loan rates to 8% for new customers till the end of the current fiscal year. The rate has been lowered from 8.5% for the first 500,000 rupees loan and gradually rises to 9.75% for loans above 20 lak rupees.

ICICI Bank shed 7.5% and HDFC dropped 7.4%.

Maruti Suzuki India fell 1% after the company said its vehicle sales rose 5.4% in January 2009 from a year ago and Tata Motors lost 4.5% after its loss topped 263 crore rupees in the three months to December.

Mahindra & Mahindra lost 4.5% after its profit fell 93.4% to 26.67 crore rupees in the third quarter ended December.

IT companies declined on continued weaknesses in the global economy. Infosys Technologies declined 2.1%, Wipro dropped 4.8%, TCS slipped 3.9% and HCL Technologies fell 2.2%.

Satyam Computer Services rose 6.6% on reports SEBI is considering relaxing takeover rules for an open offer in Satyam Computer Services in order to lure potential investors.

Sun Pharmaceutical Industries plunged 2.5% despite a 28% increase in its net profit in the three months to December.

Grasim Industries fell 0.6% after its net profit dropped 40.5% in the December quarter.

Spice Communication jumped 68.9% to 80.65 rupees.

Century Textiles fell 4.3% after reporting its cutting production of denim cloth at its factory in Madhya Pradesh to 50% of the total capacity as demand falls.