Indian stocks rise as monsoon concern eases, Hero Honda gains
Tuesday, 8 September 2009
MUMBAI, Sept. 7 (Bloomberg): India's benchmark stock index advanced for a second day after a government agency said a shortage of monsoon rainfall may ease.
Hero Honda Motors Ltd., the No. 1 motor cycle maker, added 1.2 per cent after the weather bureau said recent rains may lower the water deficit for growing crops, boosting rural income. Larsen & Toubro Ltd., India's largest engineering company, gained 0.7 per cent after it was raised to "buy" from "reduce" at Nomura Holdings Inc. Sterlite Industries (India) Ltd., the biggest copper producer, gained 1.8 per cent after the price of the metal climbed.
The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 167.68, or 1.1 per cent, to 15,856.80 at 12:29 p.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange added 1 per cent to 4,724.90. The gauge had earlier climbed to its highest in 15 months. The BSE 200 Index gained 1.2 per cent to 1,953.69.
"We expect the markets to go higher steadily from here on," said Apurva Shah, head of research at Prabhudas Liladher Pvt. in Mumbai, who has a 12-month target of 19,000 for the Sensex. "The markets have factored in all the negatives from the monsoon; and moreover things seem to be improving" after recent rainfall.
Hero Honda rose 1.2 per cent to 1,630.1 rupees. The company gets 40 per cent of its sales from rural areas, according to Kotak Securities Ltd. The monsoon rain shortfall may drop to below 20 per cent of the 50-year average by the end of the four- month season, Ajit Tyagi, director-general of India Meteorological Department, said in a phone interview today.
Larsen & Toubro added 0.7 per cent to 1,578 rupees. The stock was raised to "buy" from "reduce" at Nomura Holdings Inc., which said order inflows have "revived substantially."
The power and infrastructure sectors in India are seeing a revival in demand, ICICI Bank Ltd. Chairman K.V. Kamath said in a speech in Mumbai today. He also told reporters he expects the economy to expand between 7 per cent and 7.5 per cent in the year ending March 31.
India's economic growth is expected to slow to 6.5 per cent in the year ending March 2010, Macquarie Group Ltd. said, cutting its forecast from 7 per cent earlier, as weak monsoon rainfall affects the agriculture sector. Macquarie raised its estimate for gross domestic product expansion for the following year to 8 per cent from 7.5 per cent, it said in a note today.
Sterlite gained 1.8 per cent to 682.25 rupees. Tata Steel Ltd., the biggest producer of the alloy, advanced 1.4 per cent to 436.15 rupees. Hindalco Industries Ltd., the No. 1 aluminum producer, rose 1.2 per cent to 106.5 rupees.
Three-month delivery copper gained as much as 0.9 per cent to $6,330 a ton on the London Metal Exchange and traded at $6,319 in Singapore. Aluminum climbed 0.3 per cent to $1,855 a ton.
"This downgrade is more a hiccup than the beginning of a GDP downgrade cycle as we expect quarterly GDP growth from calendar 2010 to reach 8 per cent," Rajeev Malik, an economist at Macquarie in Singapore, said in the note. "The downward revisions are related only to the agriculture sector as non- agricultural forecasts have, in fact, been raised."
Reliance Communications Ltd., the second-largest mobile phone operator, rose 4.1 per cent to 303.95 rupees. Maruti Suzuki India Ltd., the maker of half the cars sold in India, gained 0.9 per cent to 1,561.15 rupees. Macquarie added both the stocks to it top selections. The brokerage maintained its target for the Sensex at 18,000 by March. It raised its rating on automobile stocks to "overweight" from "underweight."
Overseas funds bought a net 589 million rupees ($12 million) of Indian stocks on Sept. 3, the Securities and Exchange Board of India said on its Web site. The funds have bought 393.7 billion rupees of the nation's stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.
The following were among the most active on the exchange:
Bharat Heavy Electricals Ltd. (BHEL IN), India's biggest power equipment maker, rose 1.2 per cent to 2,239.3 rupees after it said it may name an overseas partner by October for a venture to build atomic plants in the country.
"We have zeroed in on a European partner from two with whom we were talking," Bharat Heavy Chairman K. Ravi Kumar said in a telephone interview in New Delhi today, without naming the overseas company. "The partner will be offered about 30 per cent equity. We are still negotiating some terms."
Bharat Petroleum Corp. (BPCL IN) and Hindustan Petroleum Corp. (HPCL IN): The second-biggest and the third-biggest state- run refiners were raised to "buy" from "sell" at Citigroup Inc. Bharat Petroleum advanced 6 per cent to 592.5 rupees. Hindustan Petroleum advanced 5.7 per cent to 409 rupees.
Indian Oil Corp. (IOCL IN), the nation's biggest refiner, gained in Mumbai trading after saying it planned to give free shares to investors. Indian Oil climbed as much as 7.5 per cent to 665 rupees, the highest level since Jan. 17, 2008, and advanced 6.4 per cent to 658.5 rupees.
Jaiprakash Associates Ltd. (JPA IN), the biggest builder of dams, rose 4.4 per cent to 227.35 rupees and Infrastructure Development & Finance Co. (IDFC IN) jumped 7.8 per cent to 145.3 rupees in Mumbai after the National Stock Exchange added the shares to the benchmark S&P CNX Nifty Index.
Infrastructure Development and Jaiprakash will replace National Aluminium Co. and Tata Communications Ltd. in the index.
Hero Honda Motors Ltd., the No. 1 motor cycle maker, added 1.2 per cent after the weather bureau said recent rains may lower the water deficit for growing crops, boosting rural income. Larsen & Toubro Ltd., India's largest engineering company, gained 0.7 per cent after it was raised to "buy" from "reduce" at Nomura Holdings Inc. Sterlite Industries (India) Ltd., the biggest copper producer, gained 1.8 per cent after the price of the metal climbed.
The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 167.68, or 1.1 per cent, to 15,856.80 at 12:29 p.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange added 1 per cent to 4,724.90. The gauge had earlier climbed to its highest in 15 months. The BSE 200 Index gained 1.2 per cent to 1,953.69.
"We expect the markets to go higher steadily from here on," said Apurva Shah, head of research at Prabhudas Liladher Pvt. in Mumbai, who has a 12-month target of 19,000 for the Sensex. "The markets have factored in all the negatives from the monsoon; and moreover things seem to be improving" after recent rainfall.
Hero Honda rose 1.2 per cent to 1,630.1 rupees. The company gets 40 per cent of its sales from rural areas, according to Kotak Securities Ltd. The monsoon rain shortfall may drop to below 20 per cent of the 50-year average by the end of the four- month season, Ajit Tyagi, director-general of India Meteorological Department, said in a phone interview today.
Larsen & Toubro added 0.7 per cent to 1,578 rupees. The stock was raised to "buy" from "reduce" at Nomura Holdings Inc., which said order inflows have "revived substantially."
The power and infrastructure sectors in India are seeing a revival in demand, ICICI Bank Ltd. Chairman K.V. Kamath said in a speech in Mumbai today. He also told reporters he expects the economy to expand between 7 per cent and 7.5 per cent in the year ending March 31.
India's economic growth is expected to slow to 6.5 per cent in the year ending March 2010, Macquarie Group Ltd. said, cutting its forecast from 7 per cent earlier, as weak monsoon rainfall affects the agriculture sector. Macquarie raised its estimate for gross domestic product expansion for the following year to 8 per cent from 7.5 per cent, it said in a note today.
Sterlite gained 1.8 per cent to 682.25 rupees. Tata Steel Ltd., the biggest producer of the alloy, advanced 1.4 per cent to 436.15 rupees. Hindalco Industries Ltd., the No. 1 aluminum producer, rose 1.2 per cent to 106.5 rupees.
Three-month delivery copper gained as much as 0.9 per cent to $6,330 a ton on the London Metal Exchange and traded at $6,319 in Singapore. Aluminum climbed 0.3 per cent to $1,855 a ton.
"This downgrade is more a hiccup than the beginning of a GDP downgrade cycle as we expect quarterly GDP growth from calendar 2010 to reach 8 per cent," Rajeev Malik, an economist at Macquarie in Singapore, said in the note. "The downward revisions are related only to the agriculture sector as non- agricultural forecasts have, in fact, been raised."
Reliance Communications Ltd., the second-largest mobile phone operator, rose 4.1 per cent to 303.95 rupees. Maruti Suzuki India Ltd., the maker of half the cars sold in India, gained 0.9 per cent to 1,561.15 rupees. Macquarie added both the stocks to it top selections. The brokerage maintained its target for the Sensex at 18,000 by March. It raised its rating on automobile stocks to "overweight" from "underweight."
Overseas funds bought a net 589 million rupees ($12 million) of Indian stocks on Sept. 3, the Securities and Exchange Board of India said on its Web site. The funds have bought 393.7 billion rupees of the nation's stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.
The following were among the most active on the exchange:
Bharat Heavy Electricals Ltd. (BHEL IN), India's biggest power equipment maker, rose 1.2 per cent to 2,239.3 rupees after it said it may name an overseas partner by October for a venture to build atomic plants in the country.
"We have zeroed in on a European partner from two with whom we were talking," Bharat Heavy Chairman K. Ravi Kumar said in a telephone interview in New Delhi today, without naming the overseas company. "The partner will be offered about 30 per cent equity. We are still negotiating some terms."
Bharat Petroleum Corp. (BPCL IN) and Hindustan Petroleum Corp. (HPCL IN): The second-biggest and the third-biggest state- run refiners were raised to "buy" from "sell" at Citigroup Inc. Bharat Petroleum advanced 6 per cent to 592.5 rupees. Hindustan Petroleum advanced 5.7 per cent to 409 rupees.
Indian Oil Corp. (IOCL IN), the nation's biggest refiner, gained in Mumbai trading after saying it planned to give free shares to investors. Indian Oil climbed as much as 7.5 per cent to 665 rupees, the highest level since Jan. 17, 2008, and advanced 6.4 per cent to 658.5 rupees.
Jaiprakash Associates Ltd. (JPA IN), the biggest builder of dams, rose 4.4 per cent to 227.35 rupees and Infrastructure Development & Finance Co. (IDFC IN) jumped 7.8 per cent to 145.3 rupees in Mumbai after the National Stock Exchange added the shares to the benchmark S&P CNX Nifty Index.
Infrastructure Development and Jaiprakash will replace National Aluminium Co. and Tata Communications Ltd. in the index.