Fitch upgrade fails to enthuse St: Sensex below 19k, Apollo Tyres down 15%

Fitch rating outlook upgrade has failed to enthuse investors as the rupee and inflation continue to be in focus.India’s industrial production grew only 2% in April, signalling that a recovery is still far off, while consumer-price inflation continues to remain high at 9.31% as against 9.39% in April.

The Indian markets opened in red this morning with the BSE Sensex down more than 200 points, trading below 19,000 as losses in Sun Pharma, ITC weighed.

While the BSE Sensex opened 200 points lower at 18837, the Nifty opened 55 points lower at 5700.

Sun Pharma is under pressure, the stock is down 6.2 percent after it settled a patent suit with Pfizer for $550 mn.

Apollo Tyre share fell 15 percent after the company said it has bought US-based Cooper Tire for $2.5 billion ( Rs 14,500 crore. BSE auto index is down more than 1.5 percent.

Cement stocks will be in focus after the Supreme Court on Wednesday kept the order of the competition tribunal unchanged, instructing the 10 cement companies to deposit 10% of the penalty of Rs 63 billion imposed on them for allegedly indulging in cartelization. The deadline was however stretched by 8 days to deposit the money with the tribunal.

The rupee opened weaker this morning at 58.10 against the US dollar after closing at 57.90 yesterday. RBI intervention arrested the free fall of the Rupee which touched record lows recently.

Meanwhile, the government has increased the investment limit of foreign portfolio investors in government bonds by US$5bn to US$30bn.

Finance Ministry is likely to announce measures this morning to boost foreign inflow.

Department of Telecommunication is considering lowering licence fee levy from the current 8% of adjusted gross revenue in lieu of building more expensive but environment friendly telecom towers.