Markets this week: Coal India, ITC top Sensex losers

August 2, 2013

The BSE Sensex lost 3 percent in the week ending Aug. 2, extending its losses from the previous week and marking its biggest weekly fall since mid-March.

Markets remained on the edge on uncertainty over how long the Reserve Bank of India (RBI) would continue measures to defend the rupee. The rupee fell 3.4 percent over the last five trading sessions and ended at a record closing low on Friday.

The central bank left the repo rate and cash reserve ratio unchanged at its policy review on July 30, but said it will roll back recent liquidity tightening measures when stability returns to the currency market.

Here are the top five losers and gainers:

LOSERS

Coal India: Shares in the state-owned firm ended the week down nearly 10 percent, taking its losses for the year to 28.3 percent. On Friday, the stock fell around 6 percent and hit an all-time low of 250.65 rupees during trade. The stock has now been down for three consecutive weeks.

On July 30, the government said it will sell a 5 percent stake in Coal India. In 2010, India sold a 10 percent stake in the company, raising $3.4 billion in an IPO.

Of the 45 analysts covering the stock of the world’s largest coal miner, 35 have a ‘buy’ or equivalent rating, Thomson Reuters data showed.

ITC: Consumer stocks hit record highs last month, but profit-taking pushed them lower this week.  Shares of India’s largest cigarette maker ITC, which hit an all-time high of 380 rupees on July 24, lost 9.6 percent in the last five trading sessions.

On July 25, the company disappointed investors when it missed its revenue forecast. ITC posted net sales of 73.4 billion rupees in the April-June period, whereas analysts had expected sales of 78.7 billion rupees, according to Thomson Reuters I/B/E/S.

However, in a July 29 note, Angel Broking maintained its neutral rating on the stock and said they “believe ITC’s cigarette business is well poised to continue to post a healthy profit growth”.

ONGC: Shares in ONGC fell 8.8 percent in the week, making it one of the worst Sensex performers. Since July, the stock is now down 16 percent.

However, Jefferies, which has a target price of 370 rupees on the stock, said in a note on July 15: “Lack of near-term catalysts is an issue. Diesel and gas price hikes have played out and clarity on subsidy sharing may take time. Production may also miss. Yet risk-reward is very favourable.”

On July 28, Reliance Industries and ONGC signed an initial agreement to consider sharing Reliance’s offshore infrastructure at the KG basin. The companies plan to conduct a joint study over the next nine months to work out a formal agreement and firm up commercial terms.

Hindalco: It was another week of losses for the copper producer as its shares fell 8.1 percent, after sliding nearly 9 percent the previous week.  For the year, the stock has lost more than a third of its value, which is still less than the 41 percent fall in the BSE metals index.

NTPCShares of this power company were also among the top five losers of the week, ending with losses of 8 percent. In recent news, the company reported a 1.12 percent rise in April-June net profit on July 30.

GAINERS: Wipro shares surged more than 14 percent and emerged as the best Sensex performer this week, after the company issued an above-estimate dollar revenue guidance when it declared quarterly results on July 26. TCS and Infosys gained 4.1 and 3.1 percent, respectively. Bharti Airtel, up 2.2 percent, and HDFC, up 0.3 percent, were also among top five gainers.

(You can follow Aditya on Twitter @adityayk)

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