Rain Worries in India Recede, Oil India IPO

Mayank Mehta
07 Sep, 2009
New York City

Mumbai stocks advanced as rainfall picked up in the last week. Rain deficit at the end of last week across the nation is now 21%, lower than 35% a month ago and 50% in June. The Oil India IPO receives lukewarm response on the first day of subscription.

[R]6:00 PM Mumbai, 8:30 AM New York – Mumbai stocks advanced as rainfall picked up in the last week. Rain deficit at the end of last week across the nation is now 21%, lower than 35% a month ago and 50% in June. The Oil India IPO receives lukewarm response on the first day of subscription.[/R]

Stocks in Mumbai trading gained after the finance officials of G-20 nations agreed to keep in place economic stimulus. Investors were relieved after higher rainfall in the last ten days has lowered rain deficit from more than 35% to 21% across the nation.

The Sensex index in India increased 327.20 or 2.0% to 16,016.32 and CNX Nifty index rose 102.50 or 2.1% to 4,782.90. Among the Sensex 30 stocks, 28 rose and 2 fell.

On BSE trading, 2,261 stocks advanced, 594 declined and 54 were unchanged.

Jaiprakash Associates and Infrastructure Development Finance soared after they were selected to replace Nalco and Tata Communications in the Nifty 50 index.

The Oil India IPO commenced its subscription today with issue oversubscribed 1.27 times. The oil exploration company public offering price band is between Rs 950 and Rs 1,050 and is priced between 9 to 10 times 2008 earnings. The oil company has 575 million barrels of proven oil reserves and 63.41 billion cubic meters of natural gas and produces 68,000 barrels of crude oil a day.

Gainers & Losers

Aurobindo Pharma Limited added 1.4% to Rs 705.50 and the company said it has received the U.S. regulatory approval for a generic drug.

Axis Bank Limited increased 2.8% to Rs 932.75 after the company received approval from the SEBI to launch mutual funds.

Diamond Power Infrastructure Ltd increased 4.9% to Rs 226.40.

Eicher Motors Limited increased 6.5% to Rs 481.95 after the company said it sold 2,443 buses and trucks in August.

Hiran Orgochem Limited added 4.9% to Rs 51.75 after the bulk pharmaceutical maker declared dividend and issued 4 bonus shares for share held.

ICICI Bank Limited added 6.0% to Rs 788.80 after the company executives made positive comments on economic growth.

Indian Oil Corporation Limited added 7.4% to Rs 663.15 surged to a new high in the last one year of trading and said that it plans to invest 60,000 rupees in the next five years.

Jindal Steel & Power Limited surged 7.1% to Rs 3,513.00 announced book closure for bonus issue.

KNR Constructions Limited increased 4.9% to Rs 105.65 after the company received an order worth Rs 231.28 crore.

Larsen & Toubro Limited added 1.3% to Rs 1,592.00 said is in talks to buy a thermal coal mine in Australia for about $300 million, the Economic Times reported on Monday, citing two people familiar with the matter. Recently, Coal India led a group of investors to a visit to Australia to explore coal asset purchase.

McNally Bharat Engineering Company Ltd fell 1.2% to Rs 191.30.

Petron Engineering Construction Limited surged 19.9% to Rs 154.25 after it received Rs 37.45 crore orders from Madras Cements.

Pratibha Industries Limited added 4.0% to Rs 217.90 after the water management project developer secured contract of Rs 144.69 of for supply, installation and maintenance of automatic reading water meters from Municipal Corporation of Greater Mumbai.

REI Agro Limited surged 11.5% to Rs 53.15 after the basmati rice processor said its board will meet on September 9, 2009 to consider rights issue.

Dr. Reddy’s Laboratories Limited added 2.8% to Rs 794.55.

State Bank of India added 2.9% to Rs 1,815.00 and said that local branches will sell corporate bonds and government securities to retail investors willing to invest at least Rs one lakh ($2,000). The bank for the first time will sell debts securities through branches.

Tata Steel Limited increased 1.9% to Rs 438.70 and said on Monday August steel sales at its Indian operations rose 25% from a year ago to 492,000 tons.

Uttam Galva Steels Ltd increased 9.9% to Rs 125.05 after the second largest galvanized steel maker said a unit of ArcelorMittal will take a stake in the company and become its co-promoter.

ArcelorMittal acquired 5.6% stake in the company and plans to raise its stake to 29.4% through a subscription offering in the first two weeks of November.

Tata Motors rose 8.2%, Bajaj Auto increased 3.3%, Ashok Leyland rose 2.4%, Hero Honda Motors rose 1.4% and Maruti Suzuki India rose 0.8%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 133.83 or 1.31% to 10,320.94, Hang Seng index in Hong Kong increased 310.69 or 1.53% to 20,629.31 and CSI 300 index in China higher 27.07 or 0.88% to 3,104.21. ASX 200 index in Australia increased 18.90 or 0.43% to 4,454.40. The FTSE Bursa KL Composite index in Malaysia closed higher 11.65 or 0.99% to 1,190.39.

The Kospi Index in South Korea decreased 0.33 or 0.02% to close at 1,608.57. SET index in Thailand closed higher 14.16 or 2.12% to 682.57 and JSE Index in Indonesia increased 17.66 or 0.76% to 2,340.39. The Sensex index in India increased 327.20 or 2.09% to 16,016.32.