India Budget Deficit Worries; Stocks Fall

Mayank Mehta
30 Dec, 2009
New York City

Finance Minister Mukherjee said India cannot sustain its current high fiscal deficit and need to strike a balance between growth and inflation. Budget deficit is expected to surge to record 16-year high. Stocks decline after gaining 5% in four days in a row.

[R]6:00 PM Mumbai, 8:30 AM New York – Finance Minister Mukherjee said India cannot sustain its current high fiscal deficit and need to strike a balance between growth and inflation. Budget deficit is expected to surge to record 16-year high. Stocks decline after gaining 5% in four days in a row.[/R]

The Sensex index in India decreased 57.74 or 0.3% to 17,343.82 and CNX Nifty index fell 18.50 or 0.3% to 5,169.45. Among the Sensex 30 stocks, 12 rose and 18 fell.

On BSE trading, 1,794 stocks advanced, 1,095 declined and 80 were unchanged. Auto stocks edged higher after Tata Motors traded at a new high for the year. Power generators closed higher.

Finance Minister Pranab Mukherjee today said that the government needs to strike a balance between economic growth and cutting fiscal deficit. India''s fiscal deficit is estimated to rise to 6.8% of gross domestic product in the current fiscal year to March from 6.2% in the previous year.

The government is expected to borrow Rs 500,000 crore in the current fiscal year.

Rupee edged lower 10 paisa to 46.77 against one dollar.

Gainers & Losers

Apollo Hospitals Enterprise Limited fell 2.7% to Rs 645.50 and said that it has no plans to sell-off Apollo Reach Hospital.

Atlanta Limited fell 1.4% to Rs 167.75 after the infrastructure developer said Riklin Barot, an executive director and also a promoter of the company has pledged 5.93 lakh shares representing 3.6% of the equity capital of the firm.

Bharat Heavy Electricals Limited fell 0.6% to Rs 2,359.00 said China''s manufacturer of high-voltage transformers Tebian Electric Apparatus Stock Co and the company are in talks to jointly manufacture equipment in India. This may lead to the first India-China public sector initiative in power equipment manufacturing.

Diamant Investment and Finance Limited increased 4.9% to Rs 136.75 after the road contractor said the company''s board approved a liberal 3:1 bonus issue.

Escorts Limited rose 1.5% to Rs 132.25 after the tractors maker said the company is expected to report profitable quarterly results.

Four Soft Limited rose 4.8% to Rs 28.20 after the custom software developer said that it secured a contract from Canada based Sherritt International Corp to implement its logistics software.

HCL Infosystems Limited gained 3.1% to Rs 154.25 after the company received Rs 110 crore contract from Gujarat government to develop tribal area.

Hindustan Zinc Limited added 0.1% to Rs 1,213.50 after the company revised the zinc prices upwards by 0.7% or Rs 1,000 per ton.

Hindustan Construction Company Limited rose 0.03% to Rs 148.85 after the company secured an order of Rs 374.66 crore.

Hindalco Industries Limited added 0.1% to Rs 162.35 after the stock added 18.1% in the preceding four trading sessions.

Man Industries (India) Limited the exporter of large diameter carbon steel line pipes for various high pressure transmission applications for gas advanced 3.1% to Rs 53.95.

Patels Airtemp (India) Limited increased 0.5% to Rs 75.00 after the equipment maker reported two orders totaling Rs 5.42 crore.

Radico Khaitan Limited gained 3.4% to Rs 120.15 after the liquor trader said the government approved Britain based Diageo Plc proposal to raise its stake to 100% in the Indian joint venture Diageo Radico Distilleries.

Dr Reddys Laboratories fell 2.8% to Rs 1,114.95.

Reliance Power Limited rose 0.9% to Rs 155.65.

Tata Motors Limited climbed 1.6% to Rs 792.00 and the automaker commenced trial production of the first batch of the Nano at its new plant at the Sanand, Gujarat last week.

Texmaco Limited gained 1.4% to Rs 166.35 after the heavy engineering company said SBI Mutual Fund has increased its stake in the firm.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 91.62 or 0.86% to 10,546.44, and Hang Seng index in Hong Kong decreased 2.82 or 0.01% to 21,496.62, and CSI 300 index in China higher 58.12 or 1.66% to 3,558.86. ASX 200 index in Australia decreased 11.80 or 0.24% to 4,833.30. The FTSE Bursa KL Composite index in Malaysia was lower 4.10 or 0.32% to 1,271.12.

The Kospi Index in South Korea increased 10.29 or 0.62% to close at 1,682.77. SET index in Thailand closed lower 7.62 or 1.03% to 734.54. JSE Index in Indonesia increased 15.36 or 0.61% to 2,534.36. The Sensex index in India decreased 57.74 or 0.33% to 17,343.82.