Sensex sheds 154 points; Nifty down by 59 points

Strong IIP data, positive US market trends fail to boost Indian markets

At the end of trading on 12th November, the Sensex closed at 16,693, down by 154 points from the previous day’s close while the Nifty closed at 4,953, down by 59 points, despite industrial production data being strong.

During the day, Reliance Industries (RIL) remained flat on reports that the company is looking at selling stakes in some overseas exploratory oil and gas blocks. Executive director PMS Prasad indicated that RIL holds 80%-90% participating interests in its overseas blocks and that it plans to bring the stakes down to 40%-50%.

India’s second largest mobile service provider Reliance Communications was a major gainer among the 30 Sensex stocks. It gained 2%, on reports that the company is in talks with Canadian firm Iseemedia Inc to introduce low-cost
email services on phones. Bharti Airtel was subdued. It added 27 lakh users in October 2009, taking its total subscriber base to 11.32 crore. The Cellular Operators Association of India (COAI) announced that its members added 1.02 crore users to their GSM networks in October 2009, taking their total subscriber base to 35.52 crore.

India’s largest real estate player DLF fell 3% on reports that its promoters have reached an agreement with DE Shaw to buy out the hedge fund’s stake in the privately owned DLF Assets. India’s largest power equipment maker Bharat Heavy Electricals was up marginally, on reports that the company secured an overseas order worth Rs91 crore.

Grasim Industries hit a high of Rs2,300 during the day on reports that the Aditya Birla group may hike its equity stake in the company next financial year to evade any hostile takeover attempt. However the stock closed only 0.66% up. Venus Remedies surged 2.40%, after the company received patent rights for Potentox from Companies and Intellectual Property Registration Office in South Africa.

Kirloskar Oil was up 6% on reports that it is going to sell its shareholding in its JV company to Kirloskar Systems for Rs250 crore. Steel Strips Wheels was locked at 5% upper circuit, after it bagged €28 million order from Renault.

Golden Tobacco was locked at 5% upper circuit. Pramod Jain and Pranidhi Holdings have made an open offer for 20% in Golden Tobacco at Rs101 per share. Golden Tobacco is controlled by Sanjay Dalmia. Information and broadcasting minister Ambika Soni said FDI (foreign direct investment) caps in all broadcast sectors would be reviewed and Cabinet note for rationalising FDI across broadcast sectors including DTH was being prepared. Wire and Wireless (India) hit a 20% upper circuit and Dish TV was up 4% after the Cabinet approved guidelines on HITS (Headend In The Sky).

Industrial output rose 9.1% in September 2009 over September 2008, data released by the government showed. The government revised upwards the industrial production growth for August 2009 to 11% from 10.4%. Consumer durables goods output surged by an annual 22.2% as stimulus measures, festivals and wage back-pay to government staff boosted demand.

Manufacturing production in India’s economy rose 9.3% in September 2009 from a year earlier, while mining output was up 8.6% and power generation rose 7.9%.
The food price index was up 13.68% in 12 months to 31 October 2009, the government said. The fuel index was down 1.71%. The government would release monthly data for all commodities for October 2009 on Saturday, 14 November 2009. The data was earlier scheduled to be released today.

The government on Wednesday said indirect tax receipts fell 21.6% to Rs1,27,000 crore between April 2009 to October 2009. Excise duty receipts, levied at factory gates, were down 18.8% to Rs52,566 crore in the first seven months, while customs collection declined 31.8% to Rs45,412 crore. Service tax collection fell 5.4% to Rs28,926 crore.

Asia’s key benchmark indices in China, Hong Kong, Japan, Singapore, Taiwan and South Korea fell by between 0.07%-1.39% on profit-taking after recent strong gains. The Taiwanese index remained flat. South Korea’s central bank left its key interest rate at a record low of 2%, as expected, under pressure from domestic and global policymakers not to implement a hasty exit plan despite rapid economic recovery.

As per media reports, US treasury secretary Timothy Geithner said a strong dollar was important for global stability and Asia was leading the global economic recovery. A strong dollar was important for the United States, which also recognises the important role the currency plays in global economic stability, he added. A strong dollar would bring down Indian equities.

On Wednesday 11 November, the Dow Jones Industrial Average rose 44 points ending the day at 10,291 while the S&P 500 and Nasdaq Composite were up 6 points and 16 points respectively ending the day at 1,099 and 2,167 respectively. The market sentiments were boosted after Federal Reserve officials reinforced the view that rates will remain low for some time and from the strong Chinese data on factory output and retail sales. In premarket trading, the Dow Jones was trading 14 points lower.
 —Swapnil Suvarna [email protected]
 

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