Wednesday's Asia ADR Recap: Icici Bank
05/29/08 - 06:59 PM EDT
Stockpickr Staff
Stocks in India failed to hold a positive open Thursday after the government postponed a planned cabinet meeting that was looking into ways to stop losses of over $1 billion a week for state-run oil refiners.
Dealers in the region said investors are worried the government will raise retail fuel prices at a dangerous time with inflation at three-and-a-half year highs. However, with an election year at hand, the government might be forced to come up with a more creative solution or risk upsetting the public. "Ministers will instead meet in two or three days to consider all options, including increasing fuel prices and cutting duties," Oil Minister Murli Deora said. "If there is a hike, let us face it." Traders said the expiration of derivates contracts and lower amounts of futures rollovers also helped keep Indian equities at bay. The Bombay Stock Exchange's Sensex Index fell 209.11 points, or 1.27%, to 16,316.26. Here's a look at how some India-based American depositary shares traded in the U.S. on Thursday. Shares of Tata Motors(TTM Quote - Cramer on TTM - Stock Picks), India's largest automaker, fell 5% after the company announced it will sell new shares to pay for its acquisition of Ford Motor's(F Quote - Cramer on F - Stock Picks) luxury auto brands Jaguar and Land Rover. Tata said it plans to raise $1.7 billion through three simultaneous rights issues. The company also said it plans to raise another $600 million through selling securities abroad. Analysts at Morgan Stanley, Citigroup and Kotak Securities raised issues with Tata's decision to sell new stock to raise capital. Kotak downgraded Tata Motors' stock to sell and cut its forward estimates, citing concerns that the company is diluting existing shareholders. American depositary shares of Tata, which trade on the NYSE, dropped 68 cents to $13.85.
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