India Buys Gold; Sensex Drops 3%

Mayank Mehta
03 Nov, 2009
New York City

Stocks in Mumbai fell sharply after Reliance Communications and Hindalco Industries reported weak earnings. India purchased 200 tons of gold from the IMF at $6.7 billion. The gold holding is still only 5% of its foreign reserves that total $285.5 billion.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai fell sharply after Reliance Communications and Hindalco Industries reported weak earnings. India purchased 200 tons of gold from the IMF at $6.7 billion. The gold holding is still only 5% of its foreign reserves that total $285.5 billion.[/R]

Mumbai stocks declined sharply after Reliance Communications reported 55% lower earnings from a year ago and Hindalco Industries Ltd earnings fell 52% on lower metal prices.

The Sensex index in India decreased 491.34 or 3.0% to 15,404.94 and CNX Nifty index fell 147.80 or 3.1% to 4,563.90. Among the Sensex 30 stocks, 27 declined and 3 rose.

On BSE trading, 749 stocks advanced, 1,910 declined and 66 were unchanged.

Rupee edged lower 32 paisa to 47.01 against the dollar and gold closed higher in London after India disclosed a purchase from the IMF.

India purchased 200 metric tons of gold from the IMF at a price of $6.7 billion (33,500 crore rupees). The Reserve Bank of India diversified its holdings to protect from the weakening dollar and the U.S. Federal Reserve flood its financial system with new money.

Foreign exchange reserves of India increased to $285.5 billion at the end of third week in October with gold reserves of $10.3 billion.

Gainers & Losers

ABG Shipyard Limited added 1.4% to Rs 189.20 after the shipbuilding company said second quarter sales rose 43.3% to Rs 401.6 crore from Rs 280.2 crore a year ago. Net profit for the quarter rose 75% to Rs 46.8 crore compared to net profit of Rs 26 crore a year ago.

Advanta India Limited declined 7.9% to Rs 444.95 and the international agronomic seed company said third quarter net loss of Rs 12.86 crore compared to net loss of Rs 7.01 crore a year ago.

AIA Engineering Limited decreased 4.8% to Rs 300.60 said second quarter sales fell 23.7% to Rs 218.30 crore from Rs 286.07 crore a year ago. Net profit for the quarter fell 5.5% to Rs 41.97 croreor Rs 4.45 per diluted share compared to net profit of Rs 44.42 crore or Rs 4.71 per share a year ago.

Amtek Auto Limited decreased 5.9% to Rs 164.50 an international manufacturer of automotive components and assemblies said second quarter sales fell 15.2% to Rs 267.4 crore from Rs 315.5 crore a year ago. Net profit for the quarter fell 36.5% to Rs 30.5 crore compared to net profit of Rs 48.06 crore a year ago.

Aptech Limited fell 6.0% to Rs 170.60 after the corporate training solutions provider launched a new state-of-the-art centre at Yelahanka, Bangalore.

Ashok Leyland rose 4.5% to Rs 47.50 after the manufacturing of commercial vehicles and related components said second quarter net profit surged 31.8% to Rs 88.61 crore.

Bajaj Hindustan soared today on talks of acquiring stake in competitor, Balrampur Chini. However, Balrampur slipped.

City Union Bank Limited fell 1.6% to Rs 26.50 said second quarter net profit rose 21.5% to Rs 45.75 crore.

Hindustan Dorr-Oliver Limited rose 3.9% to Rs 142.00 after the turnkey engineering solutions provider said second quarter net profit surged 96% to Rs 15.64 crore.

IRB Infrastructure Developers Ltd added 1.7% to Rs 235.40 said second quarter net profit surged 71.9% to Rs 70.82 crore.

JK Tyre & Industries Ltd rose 0.6% to Rs 148.70 after the automobile tyres maker swung to profit on higher sales.

Larsen & Toubro Limited decreased 1.8% to Rs 1,535.00 after the engineering, construction company said it had won an order Rs.6,897 crore from Maharashtra State Power Generation Co. to build three boiler turbine units for an upcoming supercritical power plant of 1,980 MW.

Mukand Limited surged 10.1% to Rs 50.45 after the specialty steel major plans to reduce to its debt of around Rs1,500 crore over the next one year through sale of its land-bank, a top company official said.

Nagarjuna Construction Company Limited added 0.1% to Rs 147.85 and second quarter sales rose 2% to Rs 1,066.55 crore from Rs 1,045.93 crore a year ago. Net profit for the quarter rose 4% to Rs 43.92 croreor Rs 1.85 per diluted share compared to net profit of Rs 42.30 crore or Rs 1.85 per share a year ago.

Nestle India Limited fell 0.01% to Rs 2,573.25 after the food maker said third quarter net profit surged 38.7%.

Patni Computer Systems Limited fell 0.9% to Rs 441.25 after the providers of information technology services and business solutions said third quarter sales fell 5.6% to Rs 804 crore from Rs 852 crore a year ago. Net profit for the quarter rose 14.3% to Rs 171.6 crore or Rs 13.07 per diluted share compared to net profit of Rs 200.2 crore or Rs 14.73 per share a year ago.

Reliance Communications Limited fell 3.5% to Rs 170.30 after the provider of telecommunications services said second quarter revenues rose 1% to Rs 5,703 crore from Rs 5,645 crore a year ago. Net profit for the quarter fell 52% to Rs 740 crore compared to net profit of Rs 1,531 crore a year ago.

S Kumars Nationwide Limited slipped 5.8% to Rs 39.60 after the manufacturer of textiles said second quarter sales rose 37% to Rs 951.4 crore from Rs 560.4 crore a year ago. Net profit for the quarter rose 1% to Rs 58.4 crore or Rs 2.39 per diluted share compared to net profit of Rs 57.8 crore or Rs 2.34 per share a year ago.

Suzlon Energy Limited plunged 10.1% to Rs 60.25 after the wind power company said second quarter sales fell 30.7% to Rs 4,793 crore from Rs 6,920 crore a year ago. Net loss for the quarter was Rs 355.5 crore or Rs 2.31 per diluted share compared to net loss of Rs 22.8 crore or Rs 0.15 per share a year ago.

Suven Life Sciences Limited declined 4.1% to Rs 25.20 after the drug intermediates and fine chemicals maker said second quarter net profit declined 48% to Rs 2.52 crore compared to net profit of Rs 4.83 crore a year ago.

Unity Infraprojects Limited closed unchanged at Rs 440.00 after the engineering and contractor in joint venture with IVRCL Infrastructures and Projects, secured a contract of Rs 1,145.88 crore from Municipal Corporation of Greater Mumbai.

Videocon Industries Limited fell 3.8% to Rs 214.25 after the manufacturer of consumer products and home appliances said second quarter sales fell 0.2% to Rs 2,621.2 crore from Rs 2,626 crore a year ago. Net profit for the quarter fell 15% to Rs 149.3 crore compared to net profit of Rs 175.5 crore a year ago.

Asian Markets Review

Hang Seng index in Hong Kong decreased 380.13 or 1.76% to 21,240.06, and CSI 300 index in China higher 42.62 or 1.26% to 3,435.42. ASX 200 index in Australia decreased 8.90 or 0.20% to 4,531.50. The FTSE Bursa KL Composite index in Malaysia was higher 0.56 or 0.05% to 1,242.32. The market in Tokyo were closed today.

The Kospi Index in South Korea decreased 9.17 or 0.59% to close at 1,549.92, SET index in Thailand closed lower 8.74 or 1.29% to 668.48. JSE Index in Indonesia decreased 37.54 or 1.58% to 2,334.11. The Sensex index in India decreased 491.34 or 3.09% to 15,404.94.