Indian Stocks Fall; Ranbaxy, Sun Pharma Up

Mayank Mehta
27 Nov, 2009
New York City

Stocks in Mumbai traded lower on the worries that Indian banks may have exposure to the loans that are in the process of rescheduling in Dubai, UAE. Ranbaxy launches generic version of herpes drug in the U.S. Sun Pharma receives US regulatory approval to sell mental disorder treatment generic drug.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded lower on the worries that Indian banks may have exposure to the loans that are in the process of rescheduling in Dubai, UAE. Ranbaxy launches generic version of herpes drug in the U.S. Sun Pharma receives US regulatory approval to sell mental disorder treatment generic drug.[/R]

Stocks in Mumbai declined after investors worried that banks may have exposure to Dubai loans that are likely to be rescheduled. The banks around the world declined after Dubai World asked banks to postpone as much as $10 billion of debt to a later date.

However, analysts downplayed the possibilities of Dubai sovereign loan default. Dubai government controlled corporations have at least $80 billion in debt and nearly $20 billion have maturity of less than two years.

UK banks have the most exposure to Dubai loans with nearly $50 billion of loans and U.S. banks have less than $9 billion followed by Japan with less than $8 billion in loan exposure, according to data available at the Bank of International Settlements and Emirates banking industry association.

The Sensex index in India decreased 222.92 or 1.3% to 16,632.01 and CNX Nifty index fell 63.80 or 1.2% to 4,941.75. Among the Sensex 30 stocks, 5 rose and 25 fell.

On BSE trading, 796 stocks advanced, 2,209 declined and 53 were unchanged.

Reliance Industries, ICICI Bank and Bharati Airtel played lead role in the strong intra-day recovery. Auto, banking and infrastructure shares rebounded from early lows.

The Reserve Bank of India governor D Subbarao today said an assessment of the impact of Dubai''s debt problems was needed before deciding a response. India''s financial integration with the global economy is deeper than its trade integration, the central bank governor said.

Rupee edged lower 46 paisa to 46.90 against one dollar.

Gainers & Losers

Bank of Baroda fell 4.8% to Rs 520.50 after bank''s chairman M.D. Mallya said the bank has total loan book exposure of between 7% and 8% in the United Arab Emirates.

HDFC Bank Limited fell 0.6% to Rs 1,747.70 said it is comfortable to aggressively market the unsecured loans such as loans issued on credit cards.

ICICI Bank Limited slipped 1.2% to Rs 855.00 and the bank said it has no material exposure to Dubai companies.

Larsen & Toubro Limited dropped 3.0% to Rs 1,581.00 after the engineering conglomerate exposure to Dubai is in the range of $20 million to $25 million, a senior company official told a television channel on Friday.

Ranbaxy Laboratories Limited added 3.9% to Rs 446.95 and the generic drug maker has launched a generic version of GlaxoSmithKline''s Valtrex in the United States with a 180-day marketing exclusivity, a company spokesman said on Friday.

Rajesh Exports Limited declined 2.0% to Rs 76.30 after the company chief told local media that the Dubai crisis will affect the business as a whole.

Reliance Communications Limited fell 1.2% to Rs 166.80 after the company slashed SMS charges, further heating up an ongoing price war in the telecom market.

Punj Lloyd Limited dropped 2.3% to Rs 201.35 after the engineering and construction firm said on Friday it has no exposure in the real estate sector in Dubai.

Siemens Limited decreased 5.9% to Rs 513.90 an electrical and electronics engineering said full-year sales fell 4% to Rs 9,286 crore from Rs 9,680 crore a year ago. Net profit for the full-year rose 17.5% to Rs 705 crore or Rs 20.90 per diluted share compared to net profit of Rs 600 crore or Rs 17.78 per share a year ago.

Sun Pharmaceutical Industries Ltd slipped 0.2% to Rs 1,460.00 said it has got tentative approval from the U.S. drug regulator for its generic product Strattera used in the treatment of mental disorders.

Suzlon Energy Limited increased 5.0% to Rs 73.20 said on Friday its unit REpower Systems AG has signed a set of wind farm project contracts with EDF Energies Nouvelles and RES Canada for delivery of up to 954 megawatt.

Tata Power Company Limited rose 0.06% to Rs 1,327.90 an integrated private power utility company said second quarter revenues fell 1.4% to Rs 4,561.17 crore from Rs 4,627.23 crore a year ago. Net profit for the quarter fell 30% to Rs 367.7 crore or Rs 15.79 per diluted share compared to net profit of Rs 527.9 crore or Rs 23.84 per share a year ago.

Tata Motors Limited slipped 2.0% to Rs 630.90 ahead of the announcement of its consolidated second quarter results today. The results will include the Jaguar Land Rover results.

Unitech Limited rose 2.5% to Rs 79.25 and the real estate developer’s chief Sanjay Chandra said it has no exposure to Dubai.

Voltas Limited the energy management company fell 0.3% to Rs 167.00.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 301.72 or 3.22% to 9,081.52, and Hang Seng index in Hong Kong decreased 1,075.91 or 4.84% to 21,134.50, and CSI 300 index in China lower 103.26 or 2.96% to 3,382.51. ASX 200 index in Australia decreased 136.50 or 2.90% to 4,572.10. Market in Malaysia were closed today.

The Kospi Index in South Korea decreased 75.02 or 4.69% to close at 1,524.50. SET index in Thailand closed lower 5.36 or 0.78% to 680.37. The Sensex index in India decreased 222.92 or 1.32% to 16,632.01. The market in Indonesia were closed today.