Indian stocks fall, led by Mahindra, on rainfall concern
Wednesday, 22 July 2009
MUMBAI, July 21 (Agencies): A key index of the Indian equities markets was ruling 111 points in the red in the afternoon trade Tuesday as investors continued to trade warily.
At 1.50 pm the 30-scrip benchmark index of the Bombay Stock Exchange (BSE), the Sensex, which opened higher at 15,218.83 points, was at 15,079.5 points - 111.51 points or 0.73 percent lower than Monday’s closing figure.
Around the same time, the S&P CNX Nifty of the National Stock Exchange (NSE) too was ruling in the red, 0.65 percent down at 4,473.2 points.
Broader market indices were ruling mixed with the BSE midcap index trading 0.08 percent lower and the BSE smallcap index ruling up 0.09 percent.
Meanwhile: India’s benchmark stock index fell the most in more than a week after the government said it’s “worried” the below average monsoon rainfall may hurt farm output, which accounts for one-fifth of the economy.
Mahindra & Mahindra Ltd., the country’s largest maker of tractors, lost 2.7 percent after Agriculture Minister Sharad Pawar told parliament late yesterday “the situation is serious” in the key northwest region. Jaiprakash Associates Ltd., the biggest maker of dams, dropped 2.2 per cent. India is the world’s second-biggest producer of rice, wheat and sugar.
“With each passing day, the monsoon concern is becoming bigger,” said R.K. Gupta, who helps oversee the equivalent of $128 million at Taurus Asset Management Ltd. in New Delhi. “The markets are looking a bit overbought, we are seeing some profit booking.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 155.69, or 1 percent, to 15,035.32 at 1:13 p.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange lost 0.8 percent to 4,465.45. The BSE 200 Index declined 0.8 percent to 1,834.11.
The decline pared the Sensex’s gains this year to 56 percent, the fifth-best performer worldwide, according to data compiled by Bloomberg. The measure is valued at 17 times reported earnings, more than twice the 8.8 multiple in March, data compiled by Bloomberg show.
Mahindra lost 2.7 per cent to 776.5 rupees. Jaiprakash declined 2.2 per cent to 218.5 rupees. Tata Motors Ltd., the maker of the world’s cheapest car, the Nano, slid 1.6 percent to 322.75 rupees.
Deficient rains have caused acreage of all major crops to lag year-earlier levels, denting prospects for bigger harvests of rice, oilseeds and sugar cane. Agriculture makes up about 20 percent of the Indian economy, according to IIFL Ltd. in Mumbai.
Prime Minister Manmohan Singh is relying on an increase in farm output to push economic growth back to a 9 percent pace and to meet a campaign promise of ensuring food security for poor families.
Rains have been 43 per cent below normal in the northwest region, the nation’s grain bowl, from June 1 to July 15, the weather bureau said last week. The region includes the biggest grain-growing states of Uttar Pradesh, Punjab and Haryana.
Sowing of monsoon crops begins in June and ends mostly by July. Harvesting starts in September.
India’s stock market rally may halt because prices reflect the current economic recovery and are no longer cheap, HSBC Holdings Plc said.
A “breather” is likely in the next couple of quarters after valuations on the benchmark Sensitive Index, or Sensex, surged to 16.5 times earnings forecast for the next 12 months, HSBC strategists led by Vivek Misra said in a note to clients yesterday. Valuations will become more reasonable as the market starts discounting earnings for the next two years, Misra said.
“The risk-reward balance is currently maintained,” Misra said in the note. “We think the market is likely to trade sideways for a couple of quarters towards the end of the year.”
At 1.50 pm the 30-scrip benchmark index of the Bombay Stock Exchange (BSE), the Sensex, which opened higher at 15,218.83 points, was at 15,079.5 points - 111.51 points or 0.73 percent lower than Monday’s closing figure.
Around the same time, the S&P CNX Nifty of the National Stock Exchange (NSE) too was ruling in the red, 0.65 percent down at 4,473.2 points.
Broader market indices were ruling mixed with the BSE midcap index trading 0.08 percent lower and the BSE smallcap index ruling up 0.09 percent.
Meanwhile: India’s benchmark stock index fell the most in more than a week after the government said it’s “worried” the below average monsoon rainfall may hurt farm output, which accounts for one-fifth of the economy.
Mahindra & Mahindra Ltd., the country’s largest maker of tractors, lost 2.7 percent after Agriculture Minister Sharad Pawar told parliament late yesterday “the situation is serious” in the key northwest region. Jaiprakash Associates Ltd., the biggest maker of dams, dropped 2.2 per cent. India is the world’s second-biggest producer of rice, wheat and sugar.
“With each passing day, the monsoon concern is becoming bigger,” said R.K. Gupta, who helps oversee the equivalent of $128 million at Taurus Asset Management Ltd. in New Delhi. “The markets are looking a bit overbought, we are seeing some profit booking.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 155.69, or 1 percent, to 15,035.32 at 1:13 p.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange lost 0.8 percent to 4,465.45. The BSE 200 Index declined 0.8 percent to 1,834.11.
The decline pared the Sensex’s gains this year to 56 percent, the fifth-best performer worldwide, according to data compiled by Bloomberg. The measure is valued at 17 times reported earnings, more than twice the 8.8 multiple in March, data compiled by Bloomberg show.
Mahindra lost 2.7 per cent to 776.5 rupees. Jaiprakash declined 2.2 per cent to 218.5 rupees. Tata Motors Ltd., the maker of the world’s cheapest car, the Nano, slid 1.6 percent to 322.75 rupees.
Deficient rains have caused acreage of all major crops to lag year-earlier levels, denting prospects for bigger harvests of rice, oilseeds and sugar cane. Agriculture makes up about 20 percent of the Indian economy, according to IIFL Ltd. in Mumbai.
Prime Minister Manmohan Singh is relying on an increase in farm output to push economic growth back to a 9 percent pace and to meet a campaign promise of ensuring food security for poor families.
Rains have been 43 per cent below normal in the northwest region, the nation’s grain bowl, from June 1 to July 15, the weather bureau said last week. The region includes the biggest grain-growing states of Uttar Pradesh, Punjab and Haryana.
Sowing of monsoon crops begins in June and ends mostly by July. Harvesting starts in September.
India’s stock market rally may halt because prices reflect the current economic recovery and are no longer cheap, HSBC Holdings Plc said.
A “breather” is likely in the next couple of quarters after valuations on the benchmark Sensitive Index, or Sensex, surged to 16.5 times earnings forecast for the next 12 months, HSBC strategists led by Vivek Misra said in a note to clients yesterday. Valuations will become more reasonable as the market starts discounting earnings for the next two years, Misra said.
“The risk-reward balance is currently maintained,” Misra said in the note. “We think the market is likely to trade sideways for a couple of quarters towards the end of the year.”