Indian Inflation Declines, Higher Infra Spending

123jump.com Staff
04 Jun, 2009
New York City

The Indian government in its agenda focused on sustaining higher economic growth, increasing stake sale of companies controlled by the state and keep debt under check. The latest read on wholesale inflation showed a decline.

[R]6:00 PM Mumbai, 8:30 AM New York – The Indian government in its agenda focused on sustaining higher economic growth, increasing stake sale of companies controlled by the state and keep debt under check. The latest read on wholesale inflation showed a decline.[/R]

The measured wholesale price index was below 1% for the twelfth week in a row. The inflation index increased 0.48% in the week ending May 23 from 0.61% increase in the previous week. The data released from the Commerce Ministry are revised after two months and today the inflation for the last week in March was revised to 0.84% from 0.28%.

President Pratibha Patil in a joint session to Parliament noted that the government will increase stake sales in large industrial companies, invite foreign investments and spend more money on infrastructure.

The higher spending cannot be funded by higher borrowing and the government will be forced to sell stakes in state controlled companies.

Oil India, NHPC Ltd and RITES Ltd are expected to sell stake through listing on the stock exchanges. Air India may also seek capital by selling stake to international airlines or to retail investors.

The Sensex index in India increased 137.78 or 0.93% closed to 15,008.68 and CNX nifty index increased 41.95 or 0.9% to 4,572.65.

Of the stocks traded on the BSE, 2,111 increased, 716 decreased and 55 were unchanged.

In trading on the BSE, turnover increased to 9,118 crore rupees from 7,074 crore rupees and on the NSE turnover increased to 26,272 crore rupees.

Of the 30 stocks in the Sensex index, 21 increased and 9 decreased.

Gainers & Losers

In trading, pharmaceuticals and consumer goods stocks were in demand.

Ranbaxy Laboratories surged 6.3% to 283.10 rupees, Sun Pharma increased 2.9% and Dr Reddy’s Labs added 4.8%.

Hindustan Unilever increased 3.75 to248.50 rupees and ITC gained 0.6% to 204.15 rupees.

ICICI Bank increased 2.8% to 740 rupees after the bank cut its lending rate by 0.5% to 15.75% and lowered the floating rate by the same to 12.75%.

Infrastructure stocks gained after President Pratibha Patil in a joint session to both houses of the Parliament announced the government agenda of higher investment in infrastructure.

L&T increased 3.6%, GMR Infrastructure added 2.4% and Reliance Infrastructure advanced 3.1%.

After weeks of rallying, Sterlite Industries declined 6.3% to 659 rupees. Sterlite led the decliners in the Sensex index.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 72.71 or 0.75% to 9,668.96, Hang Seng index in Hong Kong decreased 73.70 or 0.40% closed to 18,502.77, CSI 300 index in China higher 14.36 or 0.49% closed to 2,953.75. ASX 200 index in Australia decreased 82.60 or 2.06% closed to 3,934.60. The KL Composite index in Malaysia higher 8.57 or 0.81% closed to 1,063.97.

The Kospi Index in South Korea decreased 36.75 or 2.60% to close at 1,378.14. SET index in Thailand closed higher 11.35 or 1.95% to 593.60 and JSE Index in Indonesia increased 21.80 or 1.08% closed to 2,032.72. The Sensex index in India increased 137.78 or 0.93% closed to 15,008.68.