Monsoon Rains 29% Below Average in India

Mayank Mehta
14 Aug, 2009
New York City

India may be forced to lower its economic target in the current year near 6%. Weak monsoon, rising food prices and resurgent world energy prices may slow the economic expansion. The stocks in India may face head-winds on stretched valuations.

[R]6:00 PM Mumbai, 8:30 AM New York – India may be forced to lower its economic target in the current year near 6%. Weak monsoon, rising food prices and resurgent world energy prices may slow the economic expansion. The stocks in India may face head-winds on stretched valuations.[/R]

Monsoon worries plague Indian markets. India is bracing for one of the driest season in the last eleven years. The last drought in 2002 occurred when monsoon rains were 19% below long term average and the rains in the current season are 29% below normal.

India Meteorological Department Director Ajit Tyagi suggested that the country may be facing toughest drought this decade.

The government declared nearly quarter of 626 districts is facing drought conditions. The economic growth may not meet the expected target set by the government of 7%.

The Sensex index in India decreased 106.86 or 0.69% to 15,411.63 and CNX Nifty index dropped 24.95 or 0.54% to 4,580.05. Among the Sensex 30 stocks, 25 fell and 5 rose.

On BSE trading, 1,412 stocks advanced, 1,243 declined and 70 were unchanged.

Gainers & Losers

Aditya Birla Nuvo Limited rose 1.6% or Rs.15.40 to Rs.930.00 after the company is in talks with several U.S. based private equity investment funds to sell stakes in its financial services group. The Business Standard reported the news.

Bajaj Finserv Limited the financial services business company rose 0.5% or Rs.1.45 to Rs.293.35.

BF Utilities Limited a division of Kalyani Group of India added 5.0% or Rs.44.90 to Rs.943.20.

eClerx Services Limited rose 1.5% or Rs.4.85 to Rs.328.10 after the private equity group Sequoia Capital bought 6% stake from Burwood Ventures for nearly Rs. 40 crore. Burwood will retain its 11% remaining stake in the outsourcing firm.

ICICI Bank Limited fell 2.1% or Rs.16.00 to Rs.741.55.

Indraprastha Gas Limited surged 5.7% or Rs.8.80 to Rs.162.10 after the Reliance Industries agreed to supply natural gas from its Bay of Bengal gas fields to the distribution company. The natural gas supplied from Reliance is cheaper than the imported liquefied gas.

IndusInd Bank Ltd jumped 3.4% or Rs.3.25 to Rs.96.35.

India''s economic growth is expected to be between 6% to 6.5% in the 2009/10 fiscal year, Prime Minister''s Economic Advisory Council Chairman C Rangarajan today said.

JSW Steel Limited increased 0.7% or Rs.4.90 to Rs.732.00 after the iron and steel manufacturer filed initial public offering prospectus for JSW Energy.

Man Industries (India) Limited surged 10.7% to Rs.52.25 after the infrastructure support company received Rs 750 crore order.

MphasiS Ltd climbed 5.0% or Rs.25.95 to Rs.533.00 after the software services has agreed to buy AIG Systems Solutions India.

PSL Limited advanced 3.4% or Rs.5.35 to Rs.147.45 after the spiral weld pipes supplier received order for Rs 500 crore from GAIL.

Reliance Industries rose 0.54% to Rs 2,034.30.

Torrent Power Limited the power generator surged 1.6% or Rs.4.00 to Rs.243.00.

Tulsyan Nec Limited decreased 0.6% or Rs.0.35 to Rs.50.60 after the company board will meet next week to decide the issuance of rights share.

HDFC Bank rose 0.1% or Rs.1.90 to Rs.1,426.85.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 80.14 or 0.76% to 10,597.33, Hang Seng index in Hong Kong increased 32.03 or 0.15% to 20,893.33 and CSI 300 index in China lower 96.36 or 2.80% to 3,344.46. ASX 200 index in Australia increased 25.10 or 0.57% to 4,461.00. The FTSE Bursa KL Composite index in Malaysia closed higher 2.38 or 0.20% to 1,188.57.

The Kospi Index in South Korea increased 26.77 or 1.71% to close at 1,591.41. SET index in Thailand closed lower 1.43 or 0.22% to 654.25 and JSE Index in Indonesia decreased 9.62 or 0.40% to 2,386.86. The Sensex index in India decreased 106.86 or 0.69% to 15,411.63.