India Stocks Trade Lower; Wireless Price War

Mayank Mehta
07 Oct, 2009
New York City

Stocks in India closed lower. Tata Steel and JSW Steel said steel production increased in the quarter ending in September. Record gold price is expected to dampen demand in Diwali season. Latest mobile telecom price was dragged into the second week as Reliance follows Tata-DoCoMo price cut.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in India closed lower. Tata Steel and JSW Steel said steel production increased in the quarter ending in September. Record gold price is expected to dampen demand in Diwali season. Latest mobile telecom price was dragged into the second week as Reliance Communications lowers prices after Tata-DoCoMo offered shorted billing cycle.[/R]

Stocks in Mumbai edged lower after a sharp in rise gold prices and worries about the recent market momentum. Gold surged to a record high in New York trading to $1,045 an ounce. In Mumbai trading gold closed down Rs 66.62 to 48,701.12.

The Sensex index in India decreased 151.88 or 0.9% to 16,806.66 and CNX Nifty index fell 41.65 or 0.8% to 4,985.75. Among the Sensex 30 stocks, 20 declined and 10 rose.

On BSE trading, 1,445 stocks advanced, 1,365 declined and 90 were unchanged.

Rupee declined 0.5% to 46.67 against one dollar.

IT stocks declined as rupee surged against the dollar. Wipro led decliners in the industry with a loss of 4.5% followed by losses of at least 2.5% in Infosys Technologies and Tata Consultancy Services Ltd.

Mobile telecom operators declined as price competition heats up. Reliance Communications Ltd. lowered the price for local and international calls between 15% and 85%. The price cut is expected to be matched my Idea Cellular and Bharti Airtel as well.

The latest price war started less than a week ago when Tata-DoCoMo revised its billing plan based on per-second from per-minute.

Reliance Communications fell 2.6% to Rs 261.40 and Bharti Airtel declined 0.2% to Rs 358.75.

Gainers & Losers

Advanta India Limited increased 2.9% to Rs 588.25 an international agronomic seed company board meeting today is likely to discuss plans to raise more capital.

Axis Bank Limited fell 1.8% to Rs 980.00 said Axis Private Equity hopes to raise an additional $250 million for its infrastructure fund in six to nine months.

Era Infra Engineering Limited added 0.7% to Rs 172.00 after the company secured two contracts aggregating Rs 146.79 crore

Escorts Limited decreased 0.6% to Rs 105.75 after the tractors manufacturer said one of the promoter group companies revoked a portion of shares which it had pledged earlier.

Gitanjali Gems Limited advanced 8.2% to Rs 130.30 an integrated diamond and jewelry retailing and manufacturing company said that it has acquired entire stake in Alliance Jewelleries Pvt. Ltd through wholly owned subsidiary Brightest Circle Jewellery Pvt. Ltd.

Godrej Industries Limited advanced 6.9% to Rs 201.60 said on Wednesday it will set up a special purpose vehicle to jointly develop property in Mumbai with Godrej Properties and Godrej & Boyce Mfg Co Ltd.

Hindustan Dorr-Oliver Limited added 0.2% to Rs 138.00.

HDFC Bank Limited rose 0.7% to Rs 1,670.50.

JSW Steel Limited added 3.3% to Rs 897.95 said crude steel production increased 54% in the fiscal second quarter compared to a year ago. The company has also registered quarterly sequential growth of 12% in crude steel production, 6% in rolled flat products and 20% in rolled long products.

Jindal Saw Limited increased 2.5% to Rs 716.05 after the pipe manufacturing company said its board will meet on October 15, 2009 to consider stock split.

The India Cements Limited increased 1.5% to Rs 130.80 after the company said a global financial firm has hiked its stake in the company.

K.S. Oils Limited rose 0.8% to Rs 68.50 after the firm acquired an additional 53,000 acres for developing palm oil plantations in Indonesia through its wholly-owned Singapore subsidiary, K S Natural Resources Pte.

Larsen & Toubro Limited climbed 0.6% to Rs 1,691.35 and Supreme Court has issued a notice to the company on behalf of a petition filed by the National Highway Authority of India.

Nagarjuna Fertilizers and Chemicals Limited added 1.0% to Rs 33.55 after one of the promoter group companies hiked its stake in the company.

Dr. Reddy’s Laboratories Limited increased 1.2% to Rs 948.50 after the drug maker said it had launched two skin-care products.

Shiv-Vani Oil & Gas Exploration Services Ltd rose 3.9% to Rs 338.75.

Steel Strips Wheels Limited climbed 2.6% to Rs 88.20 after the company received an order for 19,008 steel wheel rims from Renault.

Steel Authority of India Limited rose 4.5% to Rs 173.10 and the company official said its Bhilai Steel Plant, the flagship unit of the company is facing a severe water crisis that could affect production.

Suzlon, the wind turbine maker gained 1.9% to Rs 88 after it won Rs 350 crore order from Ayen Enerji of Turkey.

Tata Steel Limited increased 3.0% to Rs 525.70 said steel sales rose 19% to 1.46 million ton in the second quarter ending in September 2009 compared to a year ago.

UltraTech Cement Limited rose 3.0% to Rs 837.60 after the board approved in principle a proposal to absorb group firm Samruddhi Cement which recently consolidated the cement unit of Grasim.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 107.80 or 1.11% to 9,799.60, Hang Seng index in Hong Kong increased 430.06 or 2.07% to 21,241.59, ASX 200 index in Australia increased 104.10 or 2.27% to 4,695.70. The FTSE Bursa KL Composite index in Malaysia was higher 5.88 or 0.48% to 1,218.61. CSI 300 index in China were closed today.

The Kospi Index in South Korea decreased 0.44 or 0.03% to close at 1,598.00 SET index in Thailand closed higher 10.53 or 1.44% to 741.92. JSE Index in Indonesia decreased 14.74 or 0.58% to 2,513.41. The Sensex index in India decreased 151.88 or 0.90% to 16,806.66.