Inflation in India Rises; Stocks Weak

Mayank Mehta
22 Oct, 2009
New York City

The Wholesale inflation index showed an increase in inflation in the week ending on October 10. Price decline two months ago was revised sharply lower. Larsen & Toubro declined after it estimated sales rise of 15% in the next year. Hero Honda net surged 95%.

[R]6:00 PM Mumbai, 8:30 AM New York – The Wholesale inflation index showed an increase in inflation in the week ending on October 10. Price decline two months ago was revised sharply lower. Larsen & Toubro declined after it estimated sales rise of 15% in the next year. Hero Honda net surged 95%.[/R]

The wholesale price index increased 1.21% from a year ago week in the week of October 10 after rising at 0.92% in the previous week. The inflation index measure is expected to be overhauled to accurately capture the changes in the consumer and industrial markets.

Food prices have skyrocketed in the last one year with prices of potato surged 104% and sugar surged 45%.

The inflation index for the week ending on August 15 was revised lower to 0.2% from the previous estimate of a decline of 0.95%.

The Reserve Bank of India is schedule to announce its rate decision on October 27.

The Sensex index in India decreased 219.43 or 1.2% to 16,789.74 and CNX Nifty index fell 75 or 1.4% to 4,988.60. Among the Sensex 30 stocks, 23 declined and 7 rose.

On the BSE trading, 871 stocks advanced, 1,863 declined and 79 were unchanged.

Foreign banks record 7.6% drop in credit flow, private players see 3.7% growth. Private and foreign banks continued to lose market share in recent months despite their claims of resumption of lending.

The finance ministry is set to push for consolidation in the public sector banking space and has started work on a road map to create between eight to ten large banks.

Rupee edged lower 15 paisa to 46.53 against one dollar.

Gainers & Losers

Allahabad Bank fell 1.4% to Rs 126.15 after the public sector bank said second quarter net interest income rose 22% to Rs 603.4 crore from Rs 494 crore a year ago. Net profit for the quarter 700% to Rs 333.6 crore or Rs 7.47 per diluted share compared to net profit of Rs 41.7 crore or Rs 0.93 per share a year ago.

Biocon Limited rose 1.1% to Rs 274.10 after the manufacturing of biotechnology products in the pharmaceutical sector said second quarter net profit surged 196.52% to Rs 74.19 crore compared to Rs 25.02 crore a year ago.

Bhushan Steel Limited fell 3.1% to Rs 1,334.90 after the coal and mineral exploration company said second quarter sales fell 14% to Rs 1,298 crore from Rs 1,515 crore a year ago. Net profit for the quarter rose 32% to Rs 189 crore compared to net profit of Rs 143 crore a year ago.

Everonn Education Limited fell 1.3% to Rs 450.50 after the education and training provider said second quarter net profit rose 147.5% to Rs 10.62 crore.

Hero Honda Motors Limited decreased 1.0% to Rs 1,596.40 after the manufacture of motorcycles said second quarter net profit rose 95% to Rs 597.14 crore compared to Rs 306 crore a year ago.

Hindustan Copper Limited added 2.9% to Rs 262.70 on the media reports that the government is considering divesting its stake in the company.

Hindustan Zinc Limited fell 1.6% to Rs 868.05 after the primary producer of lead said second quarter sales rose 3% to Rs 1,790 crore from Rs 1,744 crore a year ago. Net profit for the quarter fell 2.6% to Rs 935 crore or Rs 22.13 per diluted share compared to net profit of Rs 960 crore or Rs 22.70 per share a year ago.

Indraprastha Medical Corporation Limited jumped 3.9% to Rs 38.15 said second quarter net profit rose 45.2% to Rs 8.63 crore compared to Rs 5.93 crore a year ago.

Jaiprakash Associates Limited declined 5.7% to Rs 240.95.

Jubilant Organosys Limited decreased 4.6% to Rs 211.30 after the pharmaceuticals and life sciences products and services provider said second quarter revenues fell 1% to Rs 933.1 crore from Rs 940.5 crore a year ago. Net profit for the quarter was Rs 57.8 crore or Rs 3.91 compared to net loss of Rs 62.7 crore or Rs 4.25 per share a year ago.

KEC International Limited added 0.8% to Rs 592.85 after the power plant builder said on Thursday it has won orders worth Rs 470 crore on from Saudi Arabia and from Chad.

Kirloskar Brothers Limited surged 10.6% to Rs 233.20 after the manufacturer and exporter of pumps said second quarter revenues rose 30.4% to Rs 548.1 crore from Rs 420.4 crore a year ago. Net profit for the quarter rose 41.5% to Rs 33.1 crore compared to net profit of Rs 23.4 crore a year ago.

LANCO Industries surged 10% to Rs 43.90 after the pipes maker said second quarter net profit rose 382% to Rs 15.28 crore compared to Rs 3.16 crore a year ago.

Larsen & Toubro Limited dropped 4.3% to Rs 1,599.80 and the engineering and construction firm is likely to see new orders rise over 30% and sales by 15% in fiscal 2010, Chief Financial Officer Y.M. Deosthalee said on Thursday.

Pidilite Industries Limited added 4.2% to Rs 165.05 after the branded consumer products maker said second quarter net profit rose 158% to Rs 85.54 crore compared to Rs 33.16 crore a year ago.

Piramal Healthcare Limited fell 4.8% to Rs 365.00.

Rolta India Limited fell 2.7% to Rs 187.15 after the software services firm said first quarter revenues rose 1.3% to Rs 350.5 crore from Rs 346 crore a year ago. Net profit for the quarter rose 135% to Rs 56.1 crore or Rs 3.5 per diluted share compared to net profit of Rs 23.9 crore or Rs 1.5 per share a year ago.

Spanco Telesystems and Solutions Limited increased 4.9% to Rs 60.35.

Subex Limited rose 4.8% to Rs 89.10 after the provider of operations support system solutions for telecom applications said the Reserve Bank of India permitted the proposed restructuring of unsecured foreign currency convertible bonds by way of an exchange offer.

Tata Motors Limited fell 6.5% to Rs 540.90 said may check its latest small car Nano after reports of faulty switch.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 66.22 or 0.64% to 10,267.17, Hang Seng index in Hong Kong decreased 107.59 or 0.48% to 22,210.52, and CSI 300 index in China lower 21.96 or 0.65% to 3,347.32. ASX 200 index in Australia decreased 25.80 or 0.53% to 4,812.80. The FTSE Bursa KL Composite index in Malaysia was lower 0.04 or 0.00% to 1,260.02.

The Kospi Index in South Korea decreased 23.53 or 1.42% to close at 1,630.33 SET index in Thailand closed lower 7.59 or 1.06% to 708.76. JSE Index in Indonesia decreased 43.61 or 1.76% to 2,433.18. The Sensex index in India decreased 219.43 or 1.29% to 16,789.74.