Sensex in India Falls on Rebound in Inflation

Mayank Mehta
15 Feb, 2010
New York City

Wholesale inflation index in January rose to a high last seen fifteen months ago on a rise in food and energy prices. Weak monsoon and government stimulus have added to the inflation forces. Bharti Airtel drops nearly 9% after the company gets closer to acquire African business from Kuwait Mobile.

[R]6:00 PM Mumbai, 8:30 AM New York – Wholesale inflation index in January rose to a high last seen fifteen months ago on a rise in food and energy prices. Weak monsoon and government stimulus have added to the inflation forces. Bharti Airtel drops nearly 9% after the company gets closer to acquire African business from Kuwait Mobile.[/R]

The Sensex index in India decreased 114.24 or 0.71% to 16,038.35 and CNX Nifty index fell 24.90 or 0.52% to 4,801.95. Among the Sensex 30 stocks, 10 rose and 20 fell.

On BSE trading, 1,155 stocks advanced, 1,628 declined and 74 were unchanged.

Vascon Engineers closed at Rs 161.30, a 2.2% discount over the initial public offer price of Rs 165 and Syncom Healthcare closed at Rs 97.60 a 30.10% premium over the initial public offer price of Rs 75.

Consumer durables, capital goods, realty, consumer goods makers and banks shares fell. Reliance Industries reversed early gains.

The wholesale price index rose 8.56% in January 2010 from a year earlier, driven by higher food prices, government data showed on Monday.

Annual rate of inflation measured in wholesale price index increased to 8.56% in January compared to 7.31% for a year ago. The index increased 0.8% to 248.5 from 246.5 in December.

Sharp increase in food prices has lifted inflation to a high after weak monsoon rains and government stimulus of 12% of gross domestic product.

Farm ministry said on Feb 12 that total food grain output is expected to decline 9% to 216.85 million tons from 234.4 million tons.

Price paid by consumers in rural areas increased 17.21% from a year ago in December and in urban areas increased 14.9% in the same period.

Separately, industrial production index increased 16.8% in December and in the first nine months the index gained 8.6% compared to a year ago. Manufacturing index advanced 18.5% and electricity output decreased 5.4% in the month.

Rupee edged higher 11 paisa to 46.39 against one dollar.

Gainers & Losers

Adani Power Limited rose 0.6% to Rs 107.50 after the power project development company said on Monday it has received a letter of intent from the government of Madhya Pradesh to develop a 1,320 mega watt power project.

Bharti Airtel Limited decreased 8.7% to Rs 286.90 after the telecom operator said it is in exclusive talks to buy the African assets of Kuwait''s Mobile Telecommunications Co., based on an enterprise value of Rs 49,700 crore or nearly $11 billion.

Castrol India Limited rose 3.8% to Rs 706.95 after the lubricant company said its board will meet on February 18 to consider bonus issue.

Four Soft Limited rose 3.0% to Rs 25.35 after the software solutions developer signed a contract with Len Lothian Ltd, to implement its warehouse management system.

Hitachi Home & Life Solutions (India) Limited rose 3.9% to Rs 173.35 and the maker of air-conditioners in domestic and international market lowers air conditioner prices to increase volumes.

Hinduja Ventures Limited fell 5.7% to Rs 328.00 after the media and communications, real estate and treasury has announced that the Board, on February 13, in principle approved, to acquire all the shares of IDL Specialty Chemicals Ltd.

Jaihind Projects Limited added 5.9% to Rs 177.35 after the procurement and construction services in oil and gas announced that it has been awarded orders from Saline Water Conversion Corporation Riyadh, Kingdom of Saudi Arabia for Rs 1,100 crore in joint venture with Arabian Pipeline Projects Company Ltd.

Patni Computer Systems Limited rose 0.8% to Rs 463.50 on the expectations that the company is expected to win two large contracts worth up to $500 million.

Polaris Software Lab Limited increased 3.8% to Rs 166.30 and the company’s subsidiary launched retail store management software using Linux platform.

Reliance Communications Limited fell 2.9% to Rs 164.55 after the company said it added 28 lakh mobile subscribers in January 2010.

Tata Motors Limited rose 2.1% to Rs 684.10 after the vehicles maker said on Monday its global vehicle sales for January nearly doubled to 85,714 units from a year earlier.

Titagarh Wagons Limited rose 1.0% to Rs 468.50 after the company official told the media that the firm''s share of revenue from the private sector may rise.

Transgene Biotek Limited gained 5.0% to Rs 73.50 after it announced that its liver cancer drug cleared more clinical tests.

Tube Investments of India Limited gained 5.5% to Rs 76.55 after the company entered into an agreement for acquisition of Sedis SAS, France.