Economic Prospects Lift Sensex in India

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

Investors in India focused on economic growth prospects and higher earnings while rating agencies sounded alarm of rising government deficit. The government is likely to record annual deficit of 10% or higher for the second year in a row.

[R]5:00 PM Mumbai, 7:30 AM New York – Investors in India focused on economic growth prospects and higher earnings while rating agencies sounded alarm of rising government deficit. The government is likely to record annual deficit of 10% or higher for the second year in a row.[/R]

Investors ignored the rating agencies worries and alarm of the prospect of rising deficit and inflation in India. Investors focused on economic growth and positive climate for earnings growth as a chorus of analysts made positive comments.

India is likely to record for the second year in a row national budget deficit of more than 10%. The deficit financing will lift inflation curve and fan inflationary forces in the years to come.

The annual wholesale price index for the period ending May 16 increased 0.61%. The inflation declined from the previous twelve months ending on March 21 to 0.84% from 0.31%. The measured inflation has been on the decline on weak energy prices.

The Sensex index in India increased 186.37 or 1.32% closed to 14,296.01 and CNX Nifty index increased 60.80 or 1.4% to 4,336.85. Rupee increased to 47.62 from 47.70 against one U.S. dollar.

Of 30 stocks in the Sensex, 28 increased and 2 declined.

Trading turnover on the BSE declined to 6,892 crore rupees from 6,932.67 crore rupees and on the NSE trading surged to 25,664 crore rupees from 20,633 crore rupees.

Gainers & Losers

Banks closed higher at close after trading volatile for the most of the session.

ICICI Bank closed up 2.7% to 729.50 rupees, State Bank of India increased 2.1% to 1,828.90 crore rupees, HDF Bank increased 2% to 1,436 rupees and mortgage lending institution HDFC added 0.3% to

Mahindra & Mahindra Ltd increased 2.2% to 638.80 rupees after it reported fourth quarter profit increased 17% and net income surged.

Ipca Laboratories Limited declined 4.2% to 486.70 rupees after it reported profit decline of 20% in the fourth quarter.

Larsen & Toubro Limited increased 2.3% to 1,341.80 rupees after it reported revenues increased 24% and net income edged 3% higher.

Nagarjuna Construction Co Ltd declined 2.8% to 126.10 rupees after it reported third quarter revenues increased 35% and net income declined 8.5%.

Earnings Review

Asahi India Glass Ltd, India''s largest integrated glass company said full-year sales rose 22.6% to Rs. 1,21,821 lacs from Rs.99,353 lacs a year ago. Net loss for the year was Rs. 4,060 lacs compared to net profit of Rs.1,134 lacs a year ago.

Ipca Laboratories Limited, a pharmaceutical maker said fourth quarter sales rose 27% to Rs.317.57 crore from Rs.249.90 crore a year ago. Net profit for the quarter fell 20% to Rs.18.09 crore compared to net profit of Rs.22.64 crore a year ago.

Net sales for the fiscal year 2008 rose 21.3% to Rs.1292.64 crore from Rs.1065.24 crore a year ago. Net profit for the year fell 26% to Rs.100.80 crore compared to net profit of Rs.135.94 crore a year ago.

Larsen & Toubro Limited, the country''s largest engineering and construction firm said fourth quarter total income rose 24% to Rs.10,605.16 crore from Rs.8555.59 crore a year ago. Net profit for the quarter rose 3.3% to Rs.998.52 crore compared to net profit of Rs.966.76 crore a year ago.

Mahindra & Mahindra Limited, India''s top utility vehicles and tractor maker said fourth quarter total income rose 17.02% to Rs.3,715.88 crore from Rs.3175.45 crore a year ago. Net profit for the quarter rose 89% to Rs.418.07 crore compared to net profit of Rs.221.10 crore a year ago.

Total income for the fiscal year 2008 rose 10% to Rs.26,919.81 crore from Rs.24,445.29 crore a year ago. Net profit for the year fell 10.6% to Rs.1405.41 crore compared to net profit of Rs.1571.12 crore a year ago.

Nagarjuna Construction Company Ltd, the construction and infrastructure enterprise said third quarter total income rose 31.5% to Rs.1027 crore from Rs.781 crore a year ago. Net profit for the quarter fell 8.5% to Rs.36.27 crore or Rs.1.58 per diluted share compared to net profit of Rs.39.65 crore or Rs.1.74 per share a year ago.

Steel Authority of India Ltd, the steel making company said fourth quarter total income fell 9% to Rs.12,590.12 crore from Rs.13,856.95 crore a year ago. Net profit for the quarter fell 37% to Rs.1,486.68 crore compared to net profit of Rs.2,376.76 crore a year ago.

Total income for the fiscal year 2008 rose 11% to Rs.46,110.75 crore from Rs.41,518.74 crore a year ago. Net profit for the year fell 18% to Rs.6,174.81 crore compared to net profit of Rs.7,536.78 crore a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 12.62 or 0.13% to 9,451.39,ASX 200 index in Australia decreased 45.40 or 1.19% closed to 3,755.70. The KL Composite index in Malaysia lower 6.44 or 0.61% closed to 1,041.24.The Markets of Hong Kong and China were closed today.

The Kospi Index in South Korea increased 30.15 or 2.21% to close at 1,392.17.SET index in Thailand closed higher 0.02 or 0.00% to 555.43 and JSE Index in Indonesia increased 10.03 or 0.53% closed to 1,902.88. The Sensex index in India increased 186.37 or 1.32% closed to 14,296.01.