Indian Stocks Fall, Election Jitters, Valuations

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

Stocks in Mumbai declined on the election jitters and worries that recent rally may have stretched valuations too high. in volatile trading, stocks in the final hour fell. Banks, financial services and steel makers led the decliners.

[R]6:00PM Mumbai, 8:30AM New York – Stocks in Mumbai declined on the election jitters and worries that recent rally may have stretched valuations too high. Banks, financial services and steel makers led the decliners.[/R]

The Sensex index decreased 178.33 or 1.47% closed to 11,952.75 and CNX Nifty Index declined 1% or 36.85 to 3,625.05.

Of the stocks traded on the BSE, 1,307 declined, 1,215 increased and 96 were unchanged. Trading volume on the BSE declined to 5,830 crore rupees from 5,831.59 crore rupees. Of the 30 stocks in the Sensex, 19 declined and 11 gained.

In volatile trading stocks edged up and down on the worries that market may have overreached in the last five weeks of rally and the U.S. banks may need additional capital.

Elections jitters also played a role in trading sentiment. The fourth phase of election is scheduled to begin tomorrow and Times of India forecasted tighter race between coalitions led by BJP and Congress parties.

Gainers & Losers

Banks, financial services and steel companies were among the most active stocks.

ICICI Bank led the decliners in the bank with a loss of 4.6% followed by losses in HDFC Bank of 0.9%, in State Bank of India of 1.2%. HDFC dropped 5% to 1,767 rupees.

Tata Steel dropped 5.2% to 271.40 after the rating agency S&P kept its rating on the 3.7 billion pounds of senior secured debt with negative outlook.

Mahindra & Mahindra increased 0.27% to 535 rupees and workers at its Nashik plant began a strike. Maruti Suzuki India increased 2.1% to 811 rupees and the company said it plans to release a hatchback car on May 15.

Bharat Gears and Minda Industries gained more than 5% on the expectations that the government may increase anti-dumping duties on the imported parts.

Tulip Telecom soared 27.6% to 608.95 rupees, but Reliance Telecom and Bharti Airtel closed with fractional changes.

Software exporters declined on the worries that the U.S. will limit the outsourcing of jobs to India. TCS declined 2.8% to 632 rupees, Infosys fell 0.9% to 1,568 rupees and Wipro fell 2.5% to 359.05 rupees.

ONGC increased 0.1% to 886.25 rupees after crude oil surged above $54 a barrel in New York trading. Reliance Industries closed unchanged at 1,877.15 rupees after the stock traded as high as 1,935 rupees.

Oil marketing and distribution companies closed lower. HPCL declined 1.7%, BPCL dropped 1.9% and IOC fell 1.4%.

Cipla declined 3.6% to 227.25 rupees and Cadila Healthcare increased 5% to 336.65 rupees. Cadila received approval from the Food and Drug Administration in the U.S. for its immune suppressor during organ transplant. The sales of the drug in the category are estimated to be $650 million.

Ranbaxy increased 0.7% to 178.50 after the company said that it has launched third phase trial for anti-malaria drug to sell in India, Bangladesh and Thailand.

Asian Markets Review

The Hang Seng index in Hong Kong increased 404.49 or 2.46% closed to 16,834.57, CSI 300 index in China higher 37.96 or 1.39% closed to 2,764.98.ASX 200 index in Australia decreased 23.30 or 0.60% closed to 3,867.10. The KL Composite index in Malaysia higher 15.09 or 1.50% closed to 1,023.96..

The Kospi Index in South Korea decreased 4.47 or 0.32% to close at 1,393.45. SET index in Thailand closed higher 16.88 or 3.33% to 523.14 and JSE Index in Indonesia increased 26.27 or 1.48% closed to 1,798.34. The Sensex index in India decreased 178.33 or 1.47% closed to 11,952.75.