Indian Stock market review for Wednesday June 16 2004

Bombay shares end down, coal price hike hits

BOMBAY (Reuters) - Indian shares fell on Wednesday, with cement and steel stocks among key losers on news of higher coal prices, while even refiners fell victim to profit-booking after getting an early boost from an oil product price hike.

The 30-issue Bombay Stock Exchange index ended down 0.54 percent at 4,788.8 rupees, off an early high of 4,863.63 points. The broader 50-issue National Stock Exchange index slipped 0.42 percent to 1,494.75 points.

Data from the Bombay exchange showed declining issues beat advancing issues 880 to 659 in volume of 77 million shares.

An official of Coal India, the state-run firm which produces most of India's coal, said prices were raised by an average 16 percent from Wednesday, the first price change for nearly two years.

"The coal price hike has affected cement, steel and power stocks, pulling the index down," said Navin Roy, dealer with TAIB Securities.

Gujarat Ambuja Cements closed two percent down at 266.1 rupees, Associated Cement Companies fell 3.6 percent down to 229.65 rupees and Grasim Industries lost 2.7 percent to 910.15 rupees.

Tata Iron and Steel ended 1.6 percent lower at 283.3 rupees and Steel Authority of India shed 3.4 percent to 26 rupees.

Tata Power ended 1.37 percent down at 234.45 rupees and Reliance Energy 0.28 percent down at 545.85 rupees.

Refiner shares had risen in previous sessions on expectations of an oil product price hike after months of a freeze.

Oil Minister Mani Shankar Aiyar said late on Tuesday the government had raised petrol prices by about six percent, diesel by about five percent and cooking gas by eight percent.

But Hindustan Petroleum Corporation ended 3.5 percent down at 324.35 rupees, off a high of 354.4 rupees, while Bharat Petroleum Corporation lost 4.5 percent to 333.85 rupees, off 375 rupees.

Drug maker Cipla Ltd eased 3.57 percent to 216.15 rupees, with sentiment hurt by the World Health Organisation's removal of two of its anti-AIDS drugs from a list of pre-qualified drugs.