Indian stocks fluctuate, Mahindra falls, Software exporters gain
Tuesday, 11 August 2009
MUMBAI, Aug. 10 (Bloomberg): Indian stocks fluctuated. Mahindra & Mahindra Ltd. fell on concern a below-average monsoon may slow the country's economic growth. Tata Consultancy Services Ltd. rose on reports the global recession may be easing.
Mahindra & Mahindra, the largest maker of sport-utility vehicles and tractors, sank 7.9 per cent after an adviser to Prime Minister Manmohan Singh said a below-average monsoon may shave as much as one per centage point off India's economic growth this year.
Maruti Suzuki India Ltd., the maker of half the cars sold in India, lost 2.6 per cent. Tata Consultancy Services Ltd. led software exporters higher after an unexpected decline in the US jobless rate signaled the global recession may be easing.
"Investors are shifting from sectors dependent on rural income, like auto and fast-moving consumer goods, to sectors like exports as the global economy is on a recovery path," said Vaibhav Sanghavi, a director at Ambit Capital Ltd. in Mumbai, who manages funds for wealthy individuals.
The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 23.92, or 0.2 per cent, to 15,184.16 at 2:12 p.m. in Mumbai. The gauge swung between gains and losses at least 10 times. The S&P CNX Nifty Index on the National Stock Exchange gained 0.2 per cent to 4,489.55. The BSE 200 Index increased 0.1 per cent to 1,850.48.
India's monsoon rains, the main source of irrigation for the nation's 235 million farmers, have been below average in the past two weeks, threatening harvests of crops such as sugar cane and rice.
A normal monsoon is key to Prime Minister Singh's efforts to push economic expansion back to a 9 per cent pace and cool prices of essential commodities such as sugar and lentils.
Agriculture makes up about 20 per cent of the Indian economy, according to IIFL Ltd. in Mumbai.
Mahindra slid 7.9 per cent to 769.8 rupees. Maruti declined 2.6 per cent to 1,259.55 rupees. Hero Honda Motors Ltd., the biggest motorcycle maker, lost 3.6 per cent to 1,425.65 rupees. Hindustan Unilever Ltd., the largest household products maker, declined 3.8 per cent to 259.4 rupees.
Tata Consultancy, the biggest software services exporter rose 7.5 per cent to 547.1 rupees after an unexpected decline in the US jobless rate signaled the global recession may be easing. Infosys Technologies Ltd., the second-largest software services provider, gained 3.4 per cent to 2,108.5 rupees after Nobel Prize-winning economist Paul Krugman said the deepest slump since the Great Depression may be ending. Wipro Ltd., the third-biggest software services provider, gained 4 per cent to 519.95 rupees.
South Asia's largest economy may now grow about 6 per cent this fiscal year, said Raghuram Rajan, an adviser to the premier who is also a professor of finance at the University of Chicago and a former chief economist at the International Monetary Fund.
"The monsoon will have an effect, but not as devastating as it would have been in the past," Rajan said. "Now hopefully, it takes a fraction of a per centage point or a per centage point off growth, which still looks reasonably healthy."
India now aims to increase production of winter-sown crops to compensate for a possible shortfall in summer-sown rice, Singh said last week. The area under rice cultivation, the worst hit by delayed rains, has declined by 15 million acres, he said.
"Among auto companies, Mahindra & Mahindra could see the biggest impact from lower demand for tractors," said analysts Jairam Nathan and Amit Agarwal of Kotak Securities Ltd. in a research note today. "Reduced rural income could also lead to demand declining for the company's utility vehicles. Close to 50 per cent of utility-vehicle sales come from rural areas."
Mahindra & Mahindra, the largest maker of sport-utility vehicles and tractors, sank 7.9 per cent after an adviser to Prime Minister Manmohan Singh said a below-average monsoon may shave as much as one per centage point off India's economic growth this year.
Maruti Suzuki India Ltd., the maker of half the cars sold in India, lost 2.6 per cent. Tata Consultancy Services Ltd. led software exporters higher after an unexpected decline in the US jobless rate signaled the global recession may be easing.
"Investors are shifting from sectors dependent on rural income, like auto and fast-moving consumer goods, to sectors like exports as the global economy is on a recovery path," said Vaibhav Sanghavi, a director at Ambit Capital Ltd. in Mumbai, who manages funds for wealthy individuals.
The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 23.92, or 0.2 per cent, to 15,184.16 at 2:12 p.m. in Mumbai. The gauge swung between gains and losses at least 10 times. The S&P CNX Nifty Index on the National Stock Exchange gained 0.2 per cent to 4,489.55. The BSE 200 Index increased 0.1 per cent to 1,850.48.
India's monsoon rains, the main source of irrigation for the nation's 235 million farmers, have been below average in the past two weeks, threatening harvests of crops such as sugar cane and rice.
A normal monsoon is key to Prime Minister Singh's efforts to push economic expansion back to a 9 per cent pace and cool prices of essential commodities such as sugar and lentils.
Agriculture makes up about 20 per cent of the Indian economy, according to IIFL Ltd. in Mumbai.
Mahindra slid 7.9 per cent to 769.8 rupees. Maruti declined 2.6 per cent to 1,259.55 rupees. Hero Honda Motors Ltd., the biggest motorcycle maker, lost 3.6 per cent to 1,425.65 rupees. Hindustan Unilever Ltd., the largest household products maker, declined 3.8 per cent to 259.4 rupees.
Tata Consultancy, the biggest software services exporter rose 7.5 per cent to 547.1 rupees after an unexpected decline in the US jobless rate signaled the global recession may be easing. Infosys Technologies Ltd., the second-largest software services provider, gained 3.4 per cent to 2,108.5 rupees after Nobel Prize-winning economist Paul Krugman said the deepest slump since the Great Depression may be ending. Wipro Ltd., the third-biggest software services provider, gained 4 per cent to 519.95 rupees.
South Asia's largest economy may now grow about 6 per cent this fiscal year, said Raghuram Rajan, an adviser to the premier who is also a professor of finance at the University of Chicago and a former chief economist at the International Monetary Fund.
"The monsoon will have an effect, but not as devastating as it would have been in the past," Rajan said. "Now hopefully, it takes a fraction of a per centage point or a per centage point off growth, which still looks reasonably healthy."
India now aims to increase production of winter-sown crops to compensate for a possible shortfall in summer-sown rice, Singh said last week. The area under rice cultivation, the worst hit by delayed rains, has declined by 15 million acres, he said.
"Among auto companies, Mahindra & Mahindra could see the biggest impact from lower demand for tractors," said analysts Jairam Nathan and Amit Agarwal of Kotak Securities Ltd. in a research note today. "Reduced rural income could also lead to demand declining for the company's utility vehicles. Close to 50 per cent of utility-vehicle sales come from rural areas."