Indian Stocks Fall 6% in 2-Days

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

Stocks in India dropped for the second day in a row after interim budget did not provide any corporate tax relief. The volatile foreign investors are likely to withdraw funds from the company as global economic recession widens. India is likely to miss its export target in the current fiscal year.

[R]10:00AM New York, 7:30 PM Mumbai - India to levy 35% safeguard duty on aluminium.[/R]

Indian stocks fell for the second day dragged by disappointment over the lack of corporate tax relief in the interim budget released yesterday.

Market sentiment was also shaken by fears the country’s sovereign rating may be downgraded as foreign currency inflows continue to wane.

In the current fiscal year 2009 the fiscal deficit is expected to be 6% of GDP and may fall to 5.5% of GDP in fiscal 2010.

In Mumbai, the BSE 30-share Sensex index declined 2.9% or 270.45 to 9,035, and CNX Nifty dipped 2.7% or 78 to 2770.50.

Of the stocks traded on the BSE, 682 rose, 1722 declined and 100 were unchanged.

Trading Statistics

Daily turnover on the BSE stood at 2384 crore rupees from 2,908.21 rupees yesterday.

Government to Levy 35% Duty on Aluminium

Economic Times of India reported today that the Directorate General of Safeguards, Customs and Central Excise has recommended a 35% safeguard duty on certain aluminium products for 200 days to protect the domestic industry.

The DGS proposed to levy duty on flat-rolled aluminium products for auto and construction, and aluminium foil that is consumed by the packaging industry.

The proposed duty for flat rolled products is 21% and 35% for foil.

Indian Government will not achieve $200 billion Trade Target

India’s minister of state for industry Ashwani Kumar said today India will not be able to achieve the $200 billion trade target in the current fiscal year on worsening conditions on the financial markets.

Kumar said exports are forecasted to in the range of $170 to $175 billion.

In addition, declining exports have mainly affected sectors such as gems and jewellery, textiles and garments, handicrafts, automobiles, leather and leather products, marine products and plastic and linoleum.

Gainers & Losers

Ranbaxy Laboratories fell 0.2% to 204.65 rupees and Reliance Industries shed 3.9%.

ONGC fell 1.5% as crude oil prices fell below $37 per barrel. Financial stocks shed. ICICI Bank fell 5.7%.

Tata Steel fell 6.7% on reports the company’s liquidity is weak. The recent acquisition of UK based steel maker Corus near the peak of the market has hurt the Tata Group cash liquidity.

Hindalco Industries declined 4.7% as it is proposing to use its share premium reserves to write off expenses incurred by the company on its international acquisition and domestic expansion.

Realty stocks declined. DLF slipped 5.2% and Unitech slipped 6.4% after the company reported that its founders have pledged shares equivalent to 49.5% of the company''s equity.

Hexaware Technologies increased 7.4% to 31.35 rupees after the company reported a net profit of 36.76 crore rupees in the year ended December 31.

Telecommunications stocks fell after Morgan Stanley downgraded the sector on increased competition. Bharti Airtel fell 0.8%, Idea Cellular plunged 3.1% and Reliance Communication plummeted 4.5%.

In particular, the investment opinion on Reliance Communications and Idea Cellular was downgraded to ''underweight'' while its estimated price target was lowered to 132 rupees and 37 rupees correspondingly.

Jewelry exporters declined. Su-Raj Diamonds fell 2.8%, Rajesh Exports dropped 3.6%, Gitanjali Gems slipped 4.8%, and Classic Diamonds plunged 7%.

Stock brokerage firms also dropped. India Infoline shed 1.6%, Geojit Financial Services declined 4%, Reliance Capital tumbled 4.3%, Motilal Oswal dipped 4.7% and Indiabulls Securities plummeted 6.8%.