Metal stocks rise, led by Sterlite; auto firms drop

Metal stocks rise, led by Sterlite; auto firms drop
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First Published: Mon, Jan 19 2009. 07 46 PM IST
Updated: Mon, Jan 19 2009. 07 46 PM IST
The Bombay Stock Exchange’s (BSE) benchmark index rose for a second day on Monday. Commodity producers advanced after metal prices gained on optimism that stimulus packages by the UK and the US will help economies ride out the global recession.
Sterlite Industries (India) Ltd gained 4%. Hindalco Industries Ltd added 1.3%.
”We’re are seeing a rebound in metals and that’s boosting commodity stocks,” said Jayesh Shroff, who helps manage about $4.7 billion (about Rs22,840 crore) at SBI Asset Management Co. Ltd in Mumbai.
Auto makers led by Tata Motors Ltd fell after BNP Paribas reduced its stock price estimate by 67%, saying the slowdown in demand for commercial vehicles will deepen.
The Sensex added 5.98 points, or less than 0.1%, to 9,329.57. The S&P CNX Nifty index on the National Stock Exchange (NSE) rose 17.75 points, or 0.6%, to 2,846.20.
The administration of President-elect Obama will deploy the second half of the $700 billion troubled asset relief program (TARP) ”in a very different way”, said Lawrence Summers, the president-elect’s top economic adviser. 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% to $3,475 a tonne on the London Metal Exchange, the highest since 12 January.
Sterlite climbed 4% to Rs270.30. Hindalco added 1.3% to Rs50.65. Steel Authority of India Ltd added 4.6% to Rs82.70, the highest since 7 January. Tata Steel Ltd gained 2.2% to Rs208.55. The share prices are composite of BSE and NSE rates.
Tata Motors fell 1.9% to Rs150.10.
”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. ”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% to Rs573.90 after the stock had its rating cut to ”hold” from ”buy” at BNP Paribas on 16 January.
Jet Airways (India) Ltd jumped Rs30.35, or 19%, to Rs187.50, the most since 3 November. It has secured funding of about Rs1,250 crore from Indian banks and plans to raise Rs750 crore more through loans, KG Vishwanath, senior general manager, told analysts in a conference call. Bloomberg
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First Published: Mon, Jan 19 2009. 07 46 PM IST
More Topics: Metal | Stocks | Sensex | BSE | NSE |