Sensex Gains 3.8% on Mukherjee Comments

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

Finance Minister Mukherjee said that the government is focused on increasing infrastructure spending but will meet its budget deficit target of 5.5% in the current fiscal year. Reliance Industries may hold more than expected natural gas. April exports may have declined 33%.

[R]6:00 PM Mumbai, 8:30 AM New York – Finance Minister Mukherjee said that the government is focused on increasing infrastructure spending but will meet its budget deficit target of 5.5% in the current fiscal year. Reliance Industries may hold more than expected natural gas at its reserves. April exports may have declined 33% matching the decline in March.[/R]

Stocks in Mumbai surged on the back of higher closing in the U.S. and Europe and Asia. The rally in stocks was also prompted by positive comments from Finance Minister Pranab Mukherjee. The government is focusing on infrastructure spending and will remain fiscally prudent.

Mukherjee stressed that sustained growth without additional spending is not likely but the government will stay within the budget deficit target of 5.5%. In the fiscal year ending in March 2009, the budget deficit soared to 10.6% that forced the rating agency Moody’s to lower its debt rating to two notches below investment grade.

The Federation of Indian Export Organizations estimated that exports in April may have declined as much as 33%. The government data showed a decline of 33% in March, a sixth monthly export decline.

Metals and infrastructure stocks closed higher for the second day in a row. The Sensex index increased 520.41 or 3.83% closed to 14,109.64 and CNX Nifty gained 159.35 or 3.9% to 4,276.05.

In trading on BSE, turnover declined to 6,884 crore rupees from 6,938 crore rupees and on the NSE turnover increased to 20,633 crore rupees from 19.358 crore rupees.

Of the 30 stocks in Sensex, 27 increased and 3 declined. Reliance Infrastructure was the most active stock in NSE trading.

Gainers & Losers

Reliance Industries increased 2% to 2,187.20 rupees after its partner in gas fields in Krishna Godavari gas basins estimated that two areas D-3 and D-9 may hold 20 trillion cubic feet of gas reserves. The revised estimates put the gas reserves at twice the amount in the largest gas reserve area D-6. The Reliance partner Hardy Oil & Gas in a statement revised its estimate.

ONGC surged 8.9% to 1,105 rupees after Business Standard reported that the government may revise the price of natural gas to $4.2 million Btu. The publication did not cite any source and 123jump.com could not verify the revision with ONGC.

Reliance Infrastructure surged 14.8% after its board granted 43 million warrants to Anil Ambani with a lower conversion price of 1,000 rupees. The new warrant grant will cancel the previous warrants with a conversion price of 1,822 rupees a share. The revised grant, if exercised will allow the Anil Ambani to purchase 10% stake at a cost of 4,300 crore rupees.

Banks closed higher after government controlled banks are expected to lower interest rate by full one percentage point.

ICICI Bank increased 6.6% to 710.25 rupees, HDFC Bank Ltd gained 5.5% to 1,409.10 rupees and State Bank of India surged 6.1% 1,792.90 rupees. HDFC increased 4.4%.

Software exporters closed higher after the benchmark indexes in the U.S. surged. Infosys increased 2.7%, Wipro gained 1.9% and TCS added 3.4%.
Ranbaxy Laboratories rebounded 7.1% after dropping 8.4%.

Earnings Review

Bharat Heavy Electricals Limited, an engineering and manufacturing company said fourth quarter sales rose 40% to Rs.11,134.38 crore from Rs.7,959.95 crore a year ago. Net profit for the quarter rose 21.3% to Rs.1,347.47 crore or Rs.27.53 per diluted share compared to net profit of Rs.1110.87 crore or Rs.22.69 per share a year ago.

Sales for the fiscal year 2008 rose 31% to Rs.28,089.50 crore from Rs.21,497.71 crore a year ago. Net profit for the year rose 10% to Rs.3,138.21 crore or Rs.64.11 per diluted share compared to net profit of Rs.2,859.34 crore or Rs.58.41 per share a year ago.

Bharat Heavy Electricals Limited, in the last one year traded as high as Rs.2,334.00 in May 2009 and as low as Rs.984.10 in October 2008. Based on the yesterday’s closing price of Rs.2,078.20 the company has market cap of Rs.1.02 trillion.

Brigade Enterprises Limited, the real estate development company said fourth quarter sales fell 72.6% to Rs.35.09 crore from Rs.128.11 crore a year ago. Net profit for the quarter fell 27% to Rs.15.60 crore or Rs.1.21 per diluted share compared to net profit of Rs.21.40 crore or Rs.1.91 per share a year ago.

Net sales for the fiscal year 2008 fell 24% to Rs.349.79 crore from Rs.460.71 crore a year ago. Net profit for the year fell 19.3% to Rs.83.05 crore or Rs.3.13 per diluted share compared to net profit of Rs.102.96 crore or Rs.9.18 per share a year ago.

Brigade Enterprises Limited, in the last one year traded as high as Rs.210.60 in May 2008 and as low as Rs.27.80 in March 2009. Based on the yesterday’s closing price of Rs.81.75 the company has market cap of Rs.9.26 billion.

Cummins India Limited, the manufacturer of internal combustion engines said fourth quarter total income rose 50% to Rs.1,072.16 crore from Rs.716.39 crore a year ago. Net profit for the quarter rose 56% to Rs.118.18 crore compared to net profit of Rs.75.60 crore a year ago.

Total income for the fiscal year 2008 rose 31% to Rs.3,650.49 crore from Rs.2,787 crore a year ago. Net profit for the year rose 37% to Rs.445.26 crore compared to net profit of Rs.325 crore a year ago.

Cummins India Limited, in the last one year traded as high as Rs.380.80 in September 2008 and as low as Rs.148.20 in March 2009. Based on the yesterday’s closing price of Rs.268.50 the company has market cap of Rs.53.26 billion.

Mangalore Refinery and Petrochemicals Limited, crude oil refiner said fourth quarter total income fell 31% to Rs.66,059.50 million from Rs.95,320.00 million a year ago. Net profit for the quarter rose 170% to Rs. 6,076.20 million compared to net profit of Rs. 2,253.30 million a year ago.

Total income for the fiscal year 2008 rose 17.2% to Rs. 384,303.90 million from Rs. 327,866.90 million a year ago. Net profit for the year declined 6.3% to Rs. 11,925.40 million compared to net profit of Rs. 12,722.30 million a year ago.

Mangalore Refinery and Petrochemicals Limited, in the last one year traded as high as Rs.89.60 in May 2008 and as low as Rs.30.00 in October 2008. Based on the yesterday’s closing price of Rs.71.05 the company has market cap of Rs.124.54 billion.

Mirza International Limited, the tannery and shoe maker said full-year sales rose 13.6% to Rs.361.03 crore from Rs.317.90 crore a year ago. Net profit for the year rose 48.5% to Rs.5.36 crore compared to net profit of Rs.3.61 crore a year ago.

Mirza International Limited, in the last one year traded as high as Rs.18.45 in May 2008 and as low as Rs.6.62 in March 2009. Based on the yesterday’s closing price of Rs.14.15 the company has market cap of Rs.1.31 billion.

NIIT Limited, the global information technology learning solutions company said fourth quarter revenues declined 10% to Rs.2,724 million from Rs.3,008 million a year ago. Net profit for the quarter fell 30% to Rs.177 million compared to net profit of Rs.252 million a year ago.

Net revenues for the fiscal year 2008 rose 14% to Rs.11,486 million from Rs.10,068 million a year ago. Net profit for the year fell 8% to Rs.698 million compared to net profit of Rs.756 million a year ago.

NIIT Limited, in the last one year traded as high as Rs.116.80 in June 2008 and as low as Rs.14.30 in March 2009. Based on the yesterday’s closing price of Rs.50.75 the company has market cap of Rs.8.37 billion.

Tata Communications Limited, the provider of a range of integrated communications services said fourth quarter revenues rose 4% to Rs.886.93 crore from Rs.855.53 crore a year ago. Net profit for the quarter rose 440% to Rs.302.37 crore compared to net profit of Rs.56.03 crore a year ago.

Revenues for the fiscal year 2008 rose 20% to Rs.9,963.17 crore from Rs.8,297.41 crore a year ago. Net profit for the year rose 69% to Rs.515.95 crore compared to net profit of Rs.304.90 crore a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 127.96 or 1.37% to 9,438.77, Hang Seng index in Hong Kong increased 893.71 or 5.26% closed to 17,885.27, CSI 300 index in China higher 39.95 or 1.47% closed to 2,759.71. ASX 200 index in Australia increased 12.70 or 0.34 % closed to 3,801.10. The KL Composite index in Malaysia lower 3.95 or 0.38% closed to 1,047.68.

The Kospi Index in South Korea decreased 10.02 or 0.73% to close at 1,362.02. SET index in Thailand closed higher 12.72 or 2.34% to 555.41 and JSE Index in Indonesia increased 35.26 or 1.90% closed to 1,892.84. The Sensex index in India increased 520.41 or 3.83% closed to 14,109.64.