Deficit in India Falls; Investors Pour $4.3 B

Darlington Musarurwa
01 Jun, 2009
New York City

Stocks in Mumbai gained for the fourth day in a row as rupee gained, trade deficit declined in April and foreign investors poured record investment in Indian stocks. April trade deficit declined 42% to $5 billion. Foreign investors poured $4.3 billion in Indian stocks in May.

[R]7:00 PM Mumbai, 9:30 AM New York – Stocks in Mumbai gained for the fourth day in a row as rupee gained, trade deficit declined in April and foreign investors poured record investment in Indian stocks.[/R]

Stocks in Mumbai trading closed higher for the fourth day in a row after rupee gained and foreign investors’ poured record amount in stocks last month. April trade deficit declined but India continues to generate trade deficit even when oil imports fell nearly 60% in the month.

April exports declined 33% to $10.74 billion from a year ago of $16.07 billion. Exports fell 16.4% in rupees. Imports in the month fell 36.6% to $15.75 billion from a year ago and declined 20.6% to 78,832 crore rupees.

Oil imports in the month plunged 58.5% to $3.634 billion. Trade deficit in April decreased to $5 billion from $8.7 billion a year ago.

The Sensex index in India increased 215.38 or 1.47% closed to 14,840.63 and is up 53.8% for the year. The CNX Nifty index increased 80.95 or 1.8% to 4,529.90.

The Sensex added 28% in May, its best monthly gain in the last fifteen years.

Rupee in trading closed up 0.3% to 46.95 against dollar on a fall in trade deficit and continued fund flows from foreign investors. Overseas investors in May net purchased $4.3 billion of stocks.

Of the 30 stocks in the Sensex, 23 increased and 7 declined.

Daily turnover on the BSE increased to 8,141 crore rupees from 8,444.33 crore rupees and on the NSE turnover decreased to 24,877 crore rupees from 27,356.32 crore rupees.

Of the stocks traded on the BSE, 2,282 increased, 557 declined and 42 were unchanged.

Unitech led most active stocks list on the NSE and BSE followed by Suzlon Energy and Reliance Natural Resources.

Gainers & Losers

The strength in China and Asian markets lifted metals and commodities prices. Steel, copper and shipping companies closed higher.

Sterlite Industries surged 7% to 666 rupees, Hindustan Zinc increased 4.3% to 607.50 rupees and Tata Steel Limited increased 7.8% to 437.95 rupees.

Tata Steel surged after the UK unit Corus was granted a relaxed loan covenant at a higher fee on its 3.7 billion pounds of loans.

Gokul Refoils surged 9% after the company board approved five-for-one split.

Reliance Communications surged 4.7% to 320 rupees after the media reports suggested that the company will raise $500 million from international investors ahead of 3-G and WiMax license auction.

Bharti Airtel declined 2% to 803 rupees on the worries that a merger with the South Africa based MTN will dilute earnings.

Speculators drove hotel sector stocks sharply higher on hopes lower tax rates and special interest rates subsidies. Indian Hotels Company surged 16.6%, Hotel Leela Ventures soared 22% and EIH increased 14.1%.

Wipro and Infosys added around 4% as investors speculated that new orders will boost outsourcing contracts at both software developers. TCS edged up 0.6%.

Maruti Suzuki increased 1.6% to 1,038 rupees after sales in the May month increased 15.7% to 79,872 units from a year ago.

Hero Honda Motors added 3% after it reported monthly motorcycles and scooters sales increase to 382,000 in May. TVS Motor Company added 3% after it reported sales of two-wheelers in May increased 5.2% to 118,574.

Earnings News

JMC Projects closed up its daily limit of 5% to 146 rupees after it reported fourth quarter net profit increase of 70.3% to 16.30 crore rupees and for the year increased 19.8% to 36.76 crore rupees on 44% rise in sales to 1,319 crore rupees.

Voltas surged 22% after it reported net profit rose 13.4% to 62.86 crore rupees in the fourth quarter and net sales increased 52% to 1,276 crore rupees.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 155.25 or 1.63% to 9,677.75, Hang Seng index in Hong Kong increased 717.59 or 3.95% closed to 18,888.59, CSI 300 index in China higher 98.63 or 3.57% closed to 2,858.34. ASX 200 index in Australia increased 76.30 or 2.00% closed to 3,894.40. The KL Composite index in Malaysia higher 17.69 or 1.69% closed to 1,061.80.

The Kospi Index in South Korea increased 19.21 or 1.38% to close at 1,415.10. The SET index in Thailand closed higher 19.57 or 3.49% to 579.98 and JSE Index in Indonesia increased 81.75 or 4.26% closed to 1,998.58. The Sensex index in India increased 215.38 or 1.47% closed to 14,840.63.