Indian Metal Stocks Advance, Led by Sterlite; Carmakers Drop
By Pooja Thakur
Jan. 19 (Bloomberg) -- India’s Sensitive Index rose for a second day. Commodity producers advanced after metal prices gained on optimism stimulus packages by the U.K. and the U.S. will help economies ride out the global recession.
Sterlite Industries (India) Ltd., the nation’s biggest copper and zinc producer, gained 4 percent. Hindalco Industries Ltd., India’s largest aluminum producer, added 1.3 percent.
“We’re are seeing a rebound in metals and that’s boosting commodity stocks,” said Jayesh Shroff, who helps manage about $4.7 billion at SBI Asset Management Co. in Mumbai.
Automakers led by Tata Motors Ltd., India’s largest bus and truckmaker, fell after BNP Paribas reduced its stock price estimate by 67 percent, saying the slowdown in demand for commercial vehicles will deepen.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, added 5.98, or less than 0.1 percent, to 9,329.57. The S&P CNX Nifty Index on the National Stock Exchange rose 0.6 percent to 2,846.20. The BSE 200 Index climbed 0.3 percent to 1,109.85. Nifty futures for January delivery gained 0.4 percent to 2,827.10.
The administration of President-elect Obama will deploy the second half of the $700 billion Troubled Asset Relief Program “in a very different way,” said Lawrence Summers, the president- elect’s top economic adviser. The TARP may be directed to housing, automobile loans, consumer credit, small business and municipalities rather than banks, he said.
Copper futures in New York climbed for a second day and advanced as much as 3.6 percent to $3,475 a metric ton on the London Metal Exchange, the highest since Jan. 12.
Sterlite climbed 4 percent to 270.30 rupees. Hindalco added 1.3 percent to 50.65 rupees. Steel Authority of India Ltd., the country’s second-biggest steelmaker, added 4.6 percent to 82.70 rupees, the highest since Jan. 7. Tata Steel Ltd., the nation’s largest producer, gained 2.2 percent to 208.55 rupees.
Automobiles
Tata Motors fell 1.9 percent to 150.10 rupees.
“We believe the company’s fundamentals will continue to deteriorate rather than recover from here,” Joseph George, an analyst at BNP Paribas, said in a note to clients today. “The recessionary phase of the commercial vehicle cycle has just begun. With IIP growth now close to zero, we expect freight demand to fall further, which will continue to hurt commercial vehicle sales.”
Maruti Suzuki India Ltd. dropped 2.7 percent to 573.90 rupees. The stock had its rating cut to “hold” from “buy” at BNP Paribas on Jan. 16.
The following were among the most active shares traded on the Bombay and National stock exchanges. Stock symbols are in parentheses after company names:
Airlines: Jet Airways (India) Ltd. (JETIN IN) jumped 30.35 rupees, or 19 percent, to 187.50, the most since Nov. 3, after forecasting a return to profit and raising funds. The airline has secured funding of about 12.5 billion rupees from Indian banks and plans to raise 7.5 billion rupees more through loans in the next few weeks, K.G. Vishwanath, senior general manager, told analysts on a conference call.
Other airline stocks also advanced. Kingfisher Airlines Ltd. (KAIR IN) gained 3.3 rupees, or 9.6 percent, to 37.80. SpiceJet Ltd. (SJET IN) rose 1.75 rupees, or 13 percent, to 15.25.
Jaiprakash Associates Ltd. (JPA IN) rose 3.2 rupees, or 4.9 percent, to 69.20. Net income in the quarter ended Dec. 31 rose 6 percent to 1.66 billion rupees, beating the median profit estimate of 1.38 billion rupees in a Bloomberg News survey. Total income climbed 44 percent to 14.47 billion rupees.
Larsen & Toubro Ltd. (LT IN) climbed 10.5 rupees, or 1.5 percent, to 727.65. India’s biggest engineering company is interested in acquiring Satyam Computer Services Ltd. and is opposed to any other computer services company taking over India’s fourth-largest software exporter, the Economic Times reported, citing Larsen Chairman A.M. Naik.
Satyam Computer Services Ltd. (SCS IN) gained 1 rupee, or 4.1 percent, to 25.50. The government-appointed board of the fraud-hit company said it’s talking to lenders to help it overcome a cash crunch as the company seeks to ensure that employees are paid their salaries on time, the company said in a statement yesterday.
Unitech Ltd. (UT IN) gained 2.5 rupees, or 8.5 percent, to 31.95. India’s second-biggest developer has paid as much as 80 percent of the 25 billion rupees of loans due by March, CNBC TV-18 news channel reported, citing Managing Director Sanjay Chandra.
The company’s average cost of borrowing is about 14 percent, the channel reported, citing Chandra.
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