Monsoon Revival in India; Stocks Up

Mayank Mehta
20 Aug, 2009
New York City

Mumbai stocks edged higher after revived monsoon rains lowered rain deficit in the northern region of India. Essar Oil is expected to start its natural gas production by the end of the year. Wholesale prices declined according to the latest read.

[R]6:00 PM Mumbai, 8:30 AM New York – Mumbai stocks edged higher after revived monsoon rains lowered rain deficit in the northern region of India. Essar Oil is expected to start its natural gas production by the end of the year. Wholesale prices declined according to the latest read.[/R]

Wholesale price index declined 1.53% for the 52-week period at the end of August 8 according to the latest data from the commerce ministry. Wholesale prices are on the decline from a year ago on weak export demand but food and energy heavy consumer price index is still on the rise.

Late monsoon rains are helping India to lower rain deficit according to S.Kaur, director at India Meteorological Department in an interview with Bloomberg News.

Northwest region including Punjab and Haryana rain deficit for the current monsoon season has declined from 43% to 37%. The rain deficit in the northeastern region has narrowed to 27% from 36%.

The overall deficit for the monsoon season for the period between June and August 19 is 27% of long term average rainfall of 627 millimeters.

The Sensex index increased 202.68 or 1.37% to 15,012.32 and CNX Nifty index rose 59.35 or 1.3% to 4,453.45. Among the Sensex 30 stocks, 27 advanced and 3 fell.

On BSE trading, 1,524 stocks advanced, 1,171 declined and 77 were unchanged.

Prime Minister Manmohan Singh recently said that India is equipped to handle a widespread drought as there is room for several fiscal steps to cushion the impact of a dry spell.

Gainers & Losers

Shares in Adani Power bounced around the issue price of 100 rupees after a shaky opening. The public offering is the largest public offering in the power sector in the last eighteen months.

Lucknow based Sahara Group is exploring plan to raise Rs 5,000 crore rupees, if completed the company will be the second largest real estate company listed on the exchange.

Oil exploration companies jumped after crude oil price jumped 4% in the international markets.

Oil & Natural Gas Corporation gained 2.0% or Rs.21.75 to Rs.1,183.50, Cairn India Limited surged 3.1% or Rs.7.35 to Rs.241.80 and Reliance Industries surged 2.14% to Rs 1923.95.

Essar Oil Ltd increased 1.9% to 131.10 rupees and the company is expected to commence natural gas production by the end of the year in the Bay of Bengal region which is estimated to have 2.2 trillion cubic feet of reserves. Essar controlled field is expected to produce 2.5 million cubic feet a day.

Shishir Agrawal, chief executive of Essar Exploration & Production India Ltd confirmed that the gas reserves were certified by the Directorate General of Hydrocarbons according to an interview with Bloomberg.

Allied Digital Services Limited an IT infrastructure and outsourcing company climbed 0.5% or Rs.2.25 to Rs.433.25.

Bharti Airtel Limited fell 1.1% or Rs.4.65 to Rs.400.05 after the company and MTN group Ltd extended merger talks for the second time to September 30.

Godawari Power and Ispat Limited the engaged in manufacturing steel intermediate products plunged 0.1% or Rs.0.20 to Rs.113.75. IVRCL Infrastructures & Projects limited the civil construction company added 1.4% or Rs.4.80 to Rs.329.75 after

Hanung Toys & Textiles Ltd the stuff toys and home furnishing rose 3.7% or Rs.2.60 to Rs.72.75. PSL Limited the engaged in pipe manufacturing surged 5.2% or Rs.7.65 to Rs.152.50.

Larsen & Toubro Limited the engineering and construction company added 0.08% or Rs.1.20 to Rs.1,482.20.

MphasiS Ltd decreased 0.7% or Rs.4.15 to Rs.533.75 after the information technology outsourcing company earnings are ahead of expectations.

Omaxe Limited rose 2.0% or Rs.2.05 to Rs.102.00 after the residential and commercial properties developer received regulatory approval in Uttar Pradesh.

Panacea Biotec Ltd added 5.0% or Rs.8.70 to Rs.182.70 after the vaccine maker was awarded $222.37 million contract by UNICEF.

Redington India Ltd declined 0.8% or Rs.2.00 to Rs.225.00.

Unichem Laboratories Limited the pharmaceutical company rose 1.2% or Rs.211.70 after it gets US regulatory approval for bisoprolol fumarate tablets.

Sterlite Industries (India) Limited advanced 2.1% or Rs.12.80 to Rs.623.35 after the non-ferrous metals and mining company increases offer for acquiring assets of Asarco based in the U.S.

Tata Tea Limited fell 0.05% or Rs.0.40 to Rs.888.00 after the company agreed to sell 29,39,713 shares in Rallis India to another Tata group company.

Three airline stocks rose on the speculation that the government may permit direct import of jet fuel.

Jet Airways rose 2.7% to Rs 249, King Fisher Airlines rose 2.4% to Rs 46.20 and SpiceJet climbed 1.4% to Rs 21.75 rose.

Axis Bank Limited rose 2.8% or Rs.23.40 to Rs.843.05. Bank of Baroda surged 2.9% or Rs.12.00 to Rs.425.25. HDFC Bank Limited rose 2.3% or Rs.33.40 to Rs.1,480.60. State Bank of India rose 3.7% or Rs.62.50 to Rs.1,753.60.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 179.41 or 1.76% to 10,383.41, Hang Seng index in Hong Kong increased 374.63 or 1.88% to 20,328.86 and CSI 300 index in China higher 129.82 or 4.31% to 3,144.39. ASX 200 index in Australia increased 3.70 or 0.08% to 4,377.50. The FTSE Bursa KL Composite index in Malaysia closed higher 7.90 or 0.68% to 1,163.43.

The Kospi Index in South Korea increased 30.43 or 1.97% to close at 1,576.39. SET index in Thailand closed higher 9.70 or 1.54% to 640.98 and JSE Index in Indonesia increased 50.89 or 2.23% to 2,328.64. The Sensex index in India increased 202.68 or 1.37% to 15,012.32.