Measured Inflation Stays Low in India

Mukesh Buch
21 May, 2009
New York City

The latest measure of wholesale inflation showed indicated few pressures on prices. Regional parties are still quarreling in UPA coalition and holding out for wider control in the government. Trading in stock market though declined but stays above average.

[R]6:00PM Mumbai, 8:30 AM New York – The latest measure of wholesale inflation showed indicated few pressures on prices. Regional parties are still quarreling in UPA coalition and holding out for wider control in the government. Trading in stock market though declined but stays above average.[/R]

Stocks in Mumbai trading declined after a surging as high as 19% in two day rally this week. Talks of speedier reforms, sustained economic expansion and the UPA coalition with less interference from regional parties are keeping investors optimists.

Brokerage firms are still optimistic and recommending clients not to sell in this rally and are holding the promise of higher market level by the end of the year.

The two regional parties in the UPA coalition are already jockeying and demanding more control in the cabinet and at junior ministries in the power, telecom and railway portfolio. DMK and Trinamool Congress are competing for a greater influence in the government.

The annual rate of inflation, calculated on point to point basis, stood at 0.61% for the week ended May 9 as compared to 0.48% for the previous week. Inflation in the same week a year ago was 8.57%.

The Sensex index in India decreased 324.12 or 2.31% closed to 13,736.54 and CNX Nifty index declined 59.35 or 1.4% to 4,210.95.

The daily turnover on the BSE declined 5% to 7,951 crore rupees and on the NSE dropped 14% to 24,334 crore rupees.

Of the stocks trade on the BSE, 2,106 increased, 625 declined and 41 were unchanged.

Of the 30 stocks in the Sensex index, 24 declined and 6 closed higher.

Gainers & Losers

Oil marketing and exploration firms gained on the hopes that new government will liberalize the industry at a faster pace.

Reliance Industries declined 2% to 2,110 rupees, ONGC increased 8.4%, Indian Oil surged 14% to 527.80 rupees and Hindustan Petroleum Corp jumped 14.1% to 322.20 rupees.

Construction and infrastructure development companies declined after surging more than 25% in three days of trading. L&T declined 7.7% to 1,255.20 and BHEL edged 4% lower to 1,958.

ICICI Bank declined 6%, State Bank of India dropped 4.3% and HDFC Bank edged 0.9% lower. HDFC fell 5.3%.

Tata Steel declined 0.9% and the company forecasted 25% increase in sales in the current fiscal year.

Earnings Review

Adani Enterprises Limited, the operator of international trading and infrastructure development said fourth quarter revenues rose 31% to Rs.8,676.62 crore from Rs.6,625.65 crore a year ago. Net profit for the quarter rose 21% to Rs.166.05 crore compared to net profit of Rs.137.45 crore a year ago.

Total revenues for the fiscal year 2008 rose 34% to Rs.4842.75 crore from Rs.4730.46 crore a year ago. Net profit for the year fell 36.5% to Rs.504.65 crore compared to net profit of Rs.369.74 crore a year ago.

Adani Enterprises Limited, in the last one year traded as high as Rs.884.95 in May 2008 and as low as Rs.238.00 in March 2009. Based on the yesterday’s closing price of Rs.630.00 the company has market cap of Rs.154.62 billion.

Bajaj Auto Limited, India''s second largest motorcycle maker said fourth quarter revenues fell 8.4% to Rs.1,906.02 crore from Rs.2,081.07 crore a year ago. Net profit for the quarter fell 50% to Rs.69.14 crore compared to net profit of Rs.137.71 crore a year ago.

Total revenues for the fiscal year 2008 fell 2.6% to Rs.8,926.48 crore from Rs.9,164.00 crore a year ago. Net profit for the year fell 28.5% to Rs.535.79 crore compared to net profit of Rs.749.56 crore a year ago.

Bajaj Auto Limited, in the last one year traded as high as Rs.958.90 in May 2009 and as low as Rs.294.65 in December 2008. Based on the yesterday’s closing price of Rs.926.00 the company has market cap of Rs.134.85 billion.

Mphasis Ltd, the IT solutions, services and BPO provider said second quarter revenues rose 52.3% to Rs.1,048.5 crore from Rs.688.4 crore a year ago. Net profit for the quarter rose 219% to Rs.224.46 crore or Rs.10.69 per diluted share compared to net profit of Rs.70.34 crore or Rs.3.35 per share a year ago.

Mphasis Ltd, in the last one year traded as high as Rs.300.00 in May 2009 and as low as Rs.119.40 in October 2008. Based on the yesterday’s closing price of Rs.302.50 the company has market cap of Rs.61.64 billion.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 80.49 or 0.86% to 9,264.15, Hang Seng index in Hong Kong decreased 276.35 or 1.58% closed to 17,199.49, CSI 300 index in China lower 62.86 or 2.23% closed to 2,750.01. ASX 200 index in Australia decreased 10.70 or 0.28% closed to 3,813.90. The KL Composite index in Malaysia lower 7.07 or 0.68% closed to 1,035.56.

The Kospi Index in South Korea decreased 14.05 or 0.98% to close at 1,421.65. SET index in Thailand closed lower 12.64 or 2.25% to 548.77.The Sensex index in India decreased 324.12 or 2.31% closed to 13,736.54. The Markets of Indonesia were closed today.