Monsoon Worries Resurface in India

Mayank Mehta
10 Aug, 2009
New York City

Weak monsoon rains may trim the economic expansion by as much as 1% in India. Tata Steel targeted $800 million expansion plan. NHPC Ltd IPO attracts more binds on the second day of subscription. Bharti

[R]6:00 PM Mumbai, 8:30 AM New York – Weak monsoon rains may trim the economic expansion by as much as 1% in India. Tata Steel targeted $800 million expansion plan. NHPC Ltd IPO attracts more binds on the second day of subscription. Bharti – MTN merger may face financing hurdles.[/R]

Weak monsoon and worries of rising food prices dragged the benchmark index lower. The weak monsoon may trim the economic expansion by 0.5% to 1% in the current fiscal year.

The Sensex index in India decreased 150.47 or 1% to 15,009.77 and CNX Nifty index slid 43.75 or 0.98% to 4,437.65. Among the Sensex 30 stocks, 23 declined and rest gained.

On BSE trading, 846 stocks advanced, 1,796 declined and 76 were unchanged.

The Indian Meteorological Department revised its forecast for the monsoon rain season lower to 87% long term average from the previous estimate of 93% five weeks ago.

The initial public offer of NHPC Ltd, which opened for subscription on Friday received bids for 615.05 crore shares compared to the issue size of 167.7 crore shares on its second day of subscription.

The government controlled mining company NMDC Ltd is expected to offer shares in two step offering. In the first stage the government is expected to sell 8.4% stake in the company and in the next fiscal year the additional stake is expected to be sold.

Gainers & Losers

Adlabs Films rose 2.25% to Rs 339 after the company said its board will meet August 12, 2009 to consider issuing equity shares on rights basis.

Aurobindo Pharma gained 1.13% to Rs 610 after the US drug regulator approved generic drug from the company.

Berger Paints India gained 2.6% to Rs 43.75 after the company said it has decided to install a new water based paint plant in South India.

Bharti Airtel fell 3.1% to Rs 372.10 on concerns that the company may need more debt to fund the proposed merger deal with South Africa''s MTN. The merged company will have $23 billion in market cap.

Cipla spurted 4.40% to Rs 285.10 as the sale of generic version of Tamiflu vaccine used for treating the deadly swine flu pandemic.

Glenmark Pharmaceuticals gained 2.9% to Rs 260.40.

Gulf Oil Corporation gained 2.24% to Rs 64 after the company''s shareholders approved raising funds through various options.

Hindustan Oil Exploration Company surged daily limit of 10% to Rs 199 after the company''s main hydrocarbon field, PY-1, is likely to start gas production shortly.

Hindustan Unilever dropped 4.45% to Rs 257.85 after four lakh shares (400,000) changed hands in two block deals on NSE.

Moser Baer (India) lost 2.7% to Rs 82.20 after the Supreme Court has issued a show cause notice to the company for allegedly evading taxes.

Mundra Port Special Economic Zone rose 0.6% to Rs 544.10 after the company was selected to develop a terminal at Mormugoa port at Goa.

MVL soared daily limit of 5% to Rs 154.70 after the company said its board will meet on 17 August 2009 to consider stock split.

Sterlite Industries rose 0.3% to Rs 630.70 and 15.42 lakh shares changed hands in two block deals on BSE.

Tata Steel rose 2% to Rs 465.55 after the company plans to invest Rs. 40,000 crore over the next five years to ramp up its production capacity to 16 million tons.

The spread of the swine flu disease also weighed on investor sentiment. A 4-year-old Chennai boy died of swine flu in Chennai today after a doctor in Pune, Maharashtra died in the morning becoming the sixth fatality from swine flu.

HDFC Bank sank 1.0% or Rs.14.85 to Rs.1,375.35, ICICI Bank fell 2.5% or Rs.18.75 to Rs.719.30 and State Bank of India fell 1.7% or Rs. 29.95 to Rs.1,711.90.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 112.17 or 1.08% to 10,524.26, Hang Seng index in Hong Kong increased 554.15 or 2.72% to 20,929.52 and CSI 300 index in China lower 10.56 or 0.30% to 3,544.54. ASX 200 index in Australia increased 4.70 or 0.11% to 4,304.10. The FTSE Bursa KL Composite index in Malaysia closed higher 3.12 or 0.26% to 1,188.00.

The Kospi Index in South Korea increased 0.11 or 0.01% to close at 1,576.11. SET index in Thailand closed lower 0.45 or 0.07% to 643.75 and JSE Index in Indonesia increased 40.43 or 1.72% to 2,389.56. The Sensex index in India decreased 150.47 or 0.99% to 15,009.77.