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Sensex declines; ITC falls

Sensex declines; ITC falls
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First Published: Fri, Feb 23 2007. 12 12 PM IST
Updated: Fri, Feb 23 2007. 12 12 PM IST
By Agencies
India’s Sensitive Index swung between gains and losses. ITC Ltd., the nation’s biggest cigarette maker, fell on concern the government will impose a value-added tax on cigarettes in its budget announcement next week.
“Fears of a hike in taxes for cigarettes is impacting ITC,” said R.K. Gupta, who manages the equivalent of about $68 million in Indian stocks at New Delhi-based Credit Capital Asset Management Co. “Revenue growth could be hurt with a tax increase.”
Satyam Computer Services Ltd., the nation’s fourth-biggest software services exporter, gained on speculation it may win a contract worth $200 million.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 106.41, or 0.8 %, to 13,914.90 as of 10:49 a.m. local time. The S&P/CNX Nifty Index on the National Stock Exchange slid 5, or 0.1 % to 4035.
ITC fell Rs4.2, or 2.4 %, to 169.85. All except one of India’s 28 states have introduced a value-added tax. The country started the levy on 1 April 2005. The tax, a charge on the value producers, wholesalers and retailers add to goods at each stage of their production and distribution, is meant to replace sales taxes and other levies that contribute 60 % of the states’ income.
Currently, taxes on cigarettes are at almost 130% of the value of the product, including excise duties, according to ITC.
Satyam rose Rs7.6, or 1.7%, to 467. The software developer may be close to winning a contract from a semiconductor company, UBS AG said in a note to clients today.
Contracts in Pipeline
“Satyam has three large contracts in the pipeline,” analyst Trideep Bhattacharya at UBS said in a note. “Satyam is in the final stages of bidding on a $200 million contract with a leading semiconductor vendor.”
The contract is for a period of five years. If the company wins the contract, it could be a meaningful catalyst for the stock in the near term, Bhattacharya at UBS said in the note.
Overseas investors sold a net Rs402 million ($9.1 million) worth of stocks on 21 February, according to the latest information on the Securities & Exchange Board of India’s Web site.
The following shares rose or fell. Stock symbols are in brackets after company names.
Apollo Hospitals Enterprise Ltd. (APHS IN) climbed Rs2.35, or 0.5%, to 502. India’s biggest health-care company may consider bidding for U.K. health-care chain Abbey Hospitals in a transaction that may cost as much as $150 million.
Hexaware Technologies Ltd. (HEXW IN) added Rs1.6, or 1 %, to 168.4. The software developer is seeking to buy a computer-software company in the US or Europe for as much as $40 million a leading financial daily reported, citing Chief Executive Officer Atul Nishar. Hexaware is interested in acquiring companies that support the operations of banks and financial institutions, according to the report.
Power Finance Corp. (POWF IN) rose Rs22.25, or 26%, to 107.25. Shares of the Indian state-run lender to electricity utilities will began trading today. Power Finance raised Rs9.97 billion selling 117.32 million shares at Rs85 apiece.
Wockhardt Ltd. (WPL IN) gained Rs9.85 rupees, or 3 %, to 340.8. The Indian drugmaker, which in October bought Ireland’s Pinewood Laboratories Ltd., said fourth-quarter group profit rose 19 % to 871 million rupees. Revenue climbed 45 % to 5.34 billion rupees.
Zensar Technologies Ltd. (ICIM IN) added 5.45 rupees, or 2.3 %, to 246.6. Japan’s Fujitsu Consulting may have sold its 29 % stake in India’s Zensar Technologies to local enterprise RPG Group, the Economic Times reported, without saying where it obtained the information. While the value of the transaction isn’t immediately known, Fujitsu’s stake is valued at 1.66 billion rupees, according to the report.
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First Published: Fri, Feb 23 2007. 12 12 PM IST
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