Indian Stocks Rise, Led by Metal Producers; Sun Pharma Plunges
June 26 (Bloomberg) -- Indian stocks rose, paring the benchmark index's second weekly decline since early March. Sterlite Industries (India) Ltd. led gains by metal producers on optimism economic recovery may spur demand.
Sterlite, the nation's biggest copper producer, added 3 percent as the price of the metal used in power cables rallied and a government report showed the U.S. economy shrank less than expected in the first quarter. Hindalco Industries Ltd., the largest aluminum producer, climbed 0.8 percent.
"Things are definitely improving," said Apurva Shah, head of research at Prabhudas Liladher Pvt. in Mumbai. "Positive retail sales data, ample short-term liquidity and home prices have leveled off; all point towards stabilization of the economy."
The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 181, or 1.3 percent, to 14,527 at 12:49 p.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange added 1.6 percent to 4,310. The BSE 200 Index increased 1.5 percent to 1,775.25.
Sun Pharmaceutical Industries Ltd., India's biggest drugmaker by market value, plunged 11 percent after generic drugs made by its unit Caraco Pharmaceutical Laboratories Ltd. were seized by U.S. authorities, who cited violations of manufacturing standards.
Sterlite advanced 3 percent to 593.50 rupees. Hindalco climbed 0.8 percent to 85.15 rupees. Reliance Industries Ltd., India's most valuable company, gained 1.2 percent to 1,982.50 rupees. ICICI Bank Ltd., the second-biggest lender, rose 2.9 percent to 720.55 rupees. Infosys Technologies Ltd., the second- biggest software services provider, added 0.6 percent to 1,768.80 rupees.
Tata Steel
Tata Steel Ltd. fell 4.3 percent to 382.80 rupees. India's biggest producer swung to a loss in its fourth quarter after production halved at its U.K. unit Corus and it incurred costs to reorganize its European operations.
The Sensex has risen 50 percent this year on speculation government stimulus spending worldwide will help to end the first global recession since World War II. Shares on the Sensex are valued at 16.3 times reported earnings, almost double the 8.8 times they fetched in March.
Asian stocks rose as Bridgestone Corp. narrowed its loss forecast and commodity prices jumped. The MSCI Asia Pacific Index gained 1.5 percent to 103.32, taking its advance this week to 1.9 percent. The gauge has jumped 46 percent from a more than five-year low on March 9.
Indian stocks are "fairly valued" after a 49 percent advance this year and further gains depend on government policies to boost economic growth and pare a budget deficit, Nomura Holdings Inc. said.
Defensive Stocks
The Sensex may rise to 16,400 in the next 12 months, a "muted" 14 percent gain from yesterday's close, Nomura analysts led by Prabhat Awasthi said in a report. Investors should own a mix of so-called defensive and domestic cyclical shares, they added.
Sun Pharmaceutical tumbled 11 percent to 1,143.35 rupees. Shares of Caraco, which is 76 percent owned by Sun Pharmaceutical, dropped the most in 15 years after the U.S. Food and Drug Administration said in a statement yesterday it confiscated drugs and raw ingredients for medications. Corrective actions had been taken and "continual improvements" are being made while Caraco works to resolve the agency's concerns, the company said in a statement. Mira Desai, a spokeswoman for Sun Pharmaceutical, declined to comment.
Sun's earnings in fiscal year 2011 may decline by about 8 percent if Caraco has to shut its plant, Prashant Vaishampayan, an analyst at Kotak Securities Ltd., who tracks Sun Pharmaceutical, said in a note to clients yesterday.
Tata Motors Ltd., India's biggest truckmaker and owner of Jaguar and Land Rover, fell 1 percent to 333.90 rupees. The company is expected to declare its consolidated earnings later today.
Suzlon Energy Ltd., India's biggest maker of wind-turbine generators, rose 2.6 percent to 120.60 rupees after it said it will pay $1.87 million incentive fee to bondholders, as part of a plan to pare debt.
To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
June 26 (Bloomberg) -- Indian stocks rose, paring the benchmark index's second weekly decline since early March. Sterlite Industries (India) Ltd. led gains by metal producers on optimism economic recovery may spur demand.
Sterlite, the nation's biggest copper producer, added 3 percent as the price of the metal used in power cables rallied and a government report showed the U.S. economy shrank less than expected in the first quarter. Hindalco Industries Ltd., the largest aluminum producer, climbed 0.8 percent.
"Things are definitely improving," said Apurva Shah, head of research at Prabhudas Liladher Pvt. in Mumbai. "Positive retail sales data, ample short-term liquidity and home prices have leveled off; all point towards stabilization of the economy."
The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 181, or 1.3 percent, to 14,527 at 12:49 p.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange added 1.6 percent to 4,310. The BSE 200 Index increased 1.5 percent to 1,775.25.
Sun Pharmaceutical Industries Ltd., India's biggest drugmaker by market value, plunged 11 percent after generic drugs made by its unit Caraco Pharmaceutical Laboratories Ltd. were seized by U.S. authorities, who cited violations of manufacturing standards.
Sterlite advanced 3 percent to 593.50 rupees. Hindalco climbed 0.8 percent to 85.15 rupees. Reliance Industries Ltd., India's most valuable company, gained 1.2 percent to 1,982.50 rupees. ICICI Bank Ltd., the second-biggest lender, rose 2.9 percent to 720.55 rupees. Infosys Technologies Ltd., the second- biggest software services provider, added 0.6 percent to 1,768.80 rupees.
Tata Steel
Tata Steel Ltd. fell 4.3 percent to 382.80 rupees. India's biggest producer swung to a loss in its fourth quarter after production halved at its U.K. unit Corus and it incurred costs to reorganize its European operations.
The Sensex has risen 50 percent this year on speculation government stimulus spending worldwide will help to end the first global recession since World War II. Shares on the Sensex are valued at 16.3 times reported earnings, almost double the 8.8 times they fetched in March.
Asian stocks rose as Bridgestone Corp. narrowed its loss forecast and commodity prices jumped. The MSCI Asia Pacific Index gained 1.5 percent to 103.32, taking its advance this week to 1.9 percent. The gauge has jumped 46 percent from a more than five-year low on March 9.
Indian stocks are "fairly valued" after a 49 percent advance this year and further gains depend on government policies to boost economic growth and pare a budget deficit, Nomura Holdings Inc. said.
Defensive Stocks
The Sensex may rise to 16,400 in the next 12 months, a "muted" 14 percent gain from yesterday's close, Nomura analysts led by Prabhat Awasthi said in a report. Investors should own a mix of so-called defensive and domestic cyclical shares, they added.
Sun Pharmaceutical tumbled 11 percent to 1,143.35 rupees. Shares of Caraco, which is 76 percent owned by Sun Pharmaceutical, dropped the most in 15 years after the U.S. Food and Drug Administration said in a statement yesterday it confiscated drugs and raw ingredients for medications. Corrective actions had been taken and "continual improvements" are being made while Caraco works to resolve the agency's concerns, the company said in a statement. Mira Desai, a spokeswoman for Sun Pharmaceutical, declined to comment.
Sun's earnings in fiscal year 2011 may decline by about 8 percent if Caraco has to shut its plant, Prashant Vaishampayan, an analyst at Kotak Securities Ltd., who tracks Sun Pharmaceutical, said in a note to clients yesterday.
Tata Motors Ltd., India's biggest truckmaker and owner of Jaguar and Land Rover, fell 1 percent to 333.90 rupees. The company is expected to declare its consolidated earnings later today.
Suzlon Energy Ltd., India's biggest maker of wind-turbine generators, rose 2.6 percent to 120.60 rupees after it said it will pay $1.87 million incentive fee to bondholders, as part of a plan to pare debt.
To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
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