12:30AM New York, 10:00PM Mumbai – Sensex ended a three day winning streak. Suzuki and Tata in different joint venture deals with Italian firms.

The BSE 30-share Sensex ended down 2% or 395 to 18.419. The CNX Nifty edged lower at 1.8% or 96.6 to 5,428.3. The BSE reported a turnover of 9,320 crore rupees and NSE reported turnover of 22,767.20 crore rupees.

Of the 30 shares of the Sensex, 4 gained and the remaining declined. Of the BSE stocks, 1,022 advanced, 1,692 declined, while 377 remained unchanged.

Maruti Suzuki Indian Ltd and its parent company Suzuki Motor Corporation have entered into a joint venture agreement with an Italian company Magneti Marelli, an arm of Fiat to establish a manufacturing hub for electronic control units in India.

Under the agreement, Magneti Marelli will contribute 51% share capital of the initial investment of 750 million rupees. Suzuki and its Indian arm will contribute 30% and 19% respectively. Maruti is manufacturing diesel engines with Italian technology, which they had bought from the Fiat Group, but were importing control units from Magneti Marelli.
Maruti Suzuki India closed weaker at 2% to 1, 096.8 rupees.

Fiat and Tata Motors on Friday entered into a joint venture to produce cars, engines and transmissions. In equal ownership in the venture the company will manufacture passenger cars, engines and transmissions for Indian and overseas markets at Ranjangaon, Maharashtra. The overall investment in the facility would exceed $650 million. The venture will focus on making engines, transmissions, and small cars with less than 1.4 liter engine capacity.

Tata Motors edged lower 3.4% to 802 rupees.

The Finance Minister P Chidambaram said at a presentation that global economic downturn is not likely to derail economic growth in India. He projected growth rate of between 8.5% and 9% for the current fiscal year. He expressed his concern that the rupee is at a nine-year high and he said the rupee ‘is not in a comfort zone.” He also said that he favored fewer economic zones with incentives that have sufficient infrastructure than a large number of small zones spread across the country. He worried that they will be difficult to monitor.

Reliance Industries Chairman Mukesh Ambani said that the expansion at Jamnagar refinery in Gujarat is would be completed ahead of schedule and at half the international cost for a refinery of a similar size. He said that the company plans to invest between $8 and $9 billion in the next three years to increase the capacity 1.2 million barrels per day in 2008.

Recently discovered gas blocks in Krishna Godavari basins are likely to commission production in the second half of next year with a production of 80 million cubic meters. This will double India’s gas production and reduce imports.

Reliance plans to invest $4 billion in the next few years to grow its domestic energy and oil exploration business and looking to expand the exploration business in Egypt and Russia.

Reliance in the past has grown through organic growth is now pursuing partnership and acquisition for future growth.

Reliance Industries with market capitalization of $97 billion is the largest exporter from India with total exports of $15.40 billion.

Mukesh Ambani and his family stake of $50 billion in the company ranks him as the richest man in India and likely contender for the richest man in the world. Reliance Industries was down 2.4% to 2,566.90 rupees. Ahead of the Annual General Meeting stock had run up.

Of the Sensex index, Reliance Energy rose 2.4% to 1,636.3 rupees and led the stocks in the index. ONGC gained 2.4% to 1,091.6 rupees, Mahindra & Mahindra climbed 1.79% to 828.5 rupees, and Hindalco Industries surged 1.73% to 178.9 rupees.

Of the index stocks L&T led the decliners with a loss of 3.61% to 3.360.6 rupees followed by declines in BHEL of 3.3% to 2,341.40 rupees, in Suzlon Energy of 4.5% to 1,698 rupees, in DLF of 5.8% to 865.7 rupees.

ICICI Bank declined 3.4% to 1,053 rupees, State Bank of India was down 4.2% to 1,862.3 rupees, and HDFC Bank lost 1.8% to 1,430.9 rupees.

ICICI bank said it has lowered loan rates by 0.5% across a range of loan maturities. For the loans with maturities of 390 days, 590 days, and 890 days the rates are lowered to 9% from 9.5% and on floating rate home loans rates are lowered by 0.5% to 11%.

Earlier State Bank of India lowered rates on home and auto loans. Home loans with maturity less than five years were lowered by 0.5%, by 1% for maturities between 5 and 15 years, and by 0.75% for 20 years.

11:00AM New York – Stocks in New York traded higher on retail sales and inflation data.

Stocks in early trading rose after earnings from General Electric, retail sales, and a inflation report.

The Labor Department reported that September producer price index rose 1.1% and core PPI excluding food and energy gained 0.2%.