India Inflation Falls; Election in Focus

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

Election fever and a prospect of uncertain outcome overshadowed the trading sentiment in Mumbai. Banks and software exporters declined. Shipping lines gained on a rise in freight rate index. Wholesale price index increase dropped below 0.5%.

[R]5:30PM Mumbai – Election fever and a prospect of uncertain outcome overshadowed the trading sentiment in Mumbai trading. Banks and software exporters declined. Shipping lines gained on a rise in freight rate index. Wholesale price index increase dropped below 0.5%.[/R]

Rampant speculation on election results and anxieties of a hung parliament election verdict kept investors’ focus away from markets.

Regional parties are expected to have a say in how the next governing coalitions are formed but the lines of alliances are blurry and shifting. At times, regional parties are striking alliances with two rival national parties BJP and Congress.

Wholesale price index increase measured for a year ending in the week to May 2 declined to 0.48% after rising at 0.7% at the end of the previous week. The debate for rate cut continued among economists and central bank noted that the government has provided fiscal stimulus of nearly 7% of GDP.

Trading Summary

Sensex index in India decreased 146.74 or 1.22% to 11,872.91. Of the 30 stocks in Sensex, 22 declined and 8 gained. Rupee in trading declined to 49.88 rupees to a dollar.

In trading, 2,567 shares changed hands with a total turnover of 4,564.43 crore rupees compared to yesterday’s trading with 2,595 stocks with turnover of 9,678 crore rupees on the BSE.

Foreign investors have stepped up their net investments in emerging markets and India is in the focus of several institutions from the U.S. and UK. Net inflows for the year-to-date has been 5,887.50 crore rupees, with the bulk of flows in the last six weeks.

Gainers & Losers

Energy stocks traded lower after crude oil prices edged lower in New York trading. Reliance Industries declined 1.5% to 1,908 rupees and ONGC fell 2.4%.

Real estate stocks gained after DLF completed stake sale in the company. DLF surged 7.2% and other realty stocks India bulls Real Estate and Housing Development Infrastructure increased but Unitech declined 0.5%.

Software services exporters declined in trading. Infosys fell 0.5% to 1,566.15 rupees, TCS declined 0.4% to 620.20 rupees and Wipro fell 2.8% to 364.35 rupees.

Shipping carriers increased on a rise in international freight rate index. Great Eastern jumped 6% to 244.70 rupees, Essar Shipping Port & Logistics Ltd. soared18% to 60.20 and Mercator Lines Ltd. increased 6.6% to 42.75 rupees.

Banks closed lower. ICICI Bank declined 2.4% to 536.70 rupees, HDFC Bank dropped 0.1% to 1,164.85 rupees and State Bank of India eased 0.5% to 1,267 rupees. HDFC, the housing financing agency fell 1.8% to 1,863.90 rupees.

Kotak Mahindra Bank Ltd increased 2.8%, despite rating downgrade to ‘sell’ at Deutsche Bank AG.

Asian Markets Review

In Tokyo Nikkei 225 Index closed lower 246.76 or 2.64% to 9,093.73, in Hong Kong Hang Seng index decreased 517.93 or 3.04% closed to 16,541.69. In Australia ASX 200 index lower 132.70 or 3.44% to close 3,723.40. In Malaysia KL Composite index decreased 10.85 or 1.06% closed to 1,011.99.

In South Korea Kospi Index decreased 33.57 or 2.37% to close at 1,380.95, in Thailand SET index closed lower 26.16 or 4.73% to 526.55 and Indonesia JSE Index edged decreased 66.33 or 3.58% to 1,785.00. Sensex index in India decreased 146.74 or 1.22% to 11,872.91.