Tata Steel, Jindal Steel advance; Hero Honda falls in flat market

Tata Steel, Jindal Steel advance; Hero Honda falls in flat market
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First Published: Mon, Dec 06 2010. 09 21 PM IST
Updated: Mon, Dec 06 2010. 09 21 PM IST
Mumbai: The country’s benchmark stock index rose on Monday, led by Tata Steel Ltd, which climbed after an Australian affiliate said it may be bought by Rio Tinto Group.
Tata Steel, the nation’s largest producer, climbed the most in almost four weeks.
Riversdale Mining Ltd, 24.16% owned by the Indian company, said it had discussions with Rio Tinto.
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Jindal Steel and Power Ltd also advanced 2.8% as a unit said it got approval to expand a power plant.
“Companies are looking to sell commodity assets as prices have recovered from levels seen during the global meltdown,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd in Kochi. “Demand in India is constantly on the rise, given the infrastructure creation that is taking place across the nation.”
The Bombay Stock Exchange’s sensitive index, or Sensex, advanced 14.38, or 0.1%, to 19,981.31, with 18 of its 30 components closing higher. The S&P CNX Nifty Index on the National Stock Exchange was little changed at 5,992.25. The BSE 200 Index slid 0.2% to 2,496.63. Tata Steel rose 3.3% to Rs 635.05, its best close since 10 November.
Riversdale Mining, which is developing mines in Africa, said a takeover may be valued at A$3.5 billion ($3.46 billion), or A$15 per share. Tata Steel is among shareholders that would have to support the deal. The news is a positive trigger for Tata Steel as the deal would add value of Rs 35 per share, Hiral Daiya, an analyst at Mumbai-based KRChoksey Shares and Securities Pvt. Ltd, said in a note.
Jindal Steel, the nation’s second-biggest producer of the alloy by market value, jumped 2.8% to Rs 699, its highest close since 11 November. Its Jindal Power Ltd unit said a committee set up by the environment ministry had approved the expansion of its coal-power plant in Chhattisgarh.
Hindalco Industries Ltd, the aluminium producer which also controls Atlanta-based Novelis Inc., rallied 2.8% to Rs 221.35, tracking higher commodity prices.
Sterlite Industries (India) Ltd, the nation’s biggest copper producer, rose 3.6% to Rs 171.75, the most in a month.
Copper climbed for a fifth day after Federal Reserve chairman Ben S. Bernanke said the central bank may boost purchases of US securities, boosting demand for industrial metals on economic growth.
Hero Honda Motors Ltd, the nation’s biggest motorcycle maker, lost 3.5% to Rs 1,774.80, the lowest close since 17 September.
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Graphic by Ahmed Raza Khan/Mint
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First Published: Mon, Dec 06 2010. 09 21 PM IST