India Insight

Markets this week: BHEL, Sun Pharma top Sensex losers

By Reuters Staff
August 8, 2013

By Ankush Arora and Sankalp Phartiyal

It was a tough week for Indian shares with the benchmark indexes bearing the brunt as the rupee tumbled to a fresh all-time low of 61.80 versus the dollar on Tuesday. Fears of the U.S. Federal Reserve tapering its stimulus also weighed on street sentiment. The BSE Sensex and the Nifty ended down around 2 percent each during the week.

The day the rupee breached its latest record low, India appointed former IMF chief economist Raghuram Rajan as the next Reserve Bank of India (RBI) governor.

The central bank announced fresh steps after market hours on Thursday to curb volatility in the forex market. The rupee posted its best single-day gain in two weeks in anticipation of support measures by the RBI and the government.

According to Morgan Stanley, the RBI’s cash-tightening measures in July made Indian shares much more vulnerable to global cues, especially the expected tapering of U.S. monetary stimulus.

Indian markets were closed on Friday on the occasion of Eid. Here are the top five losers and gainers of the week that ended on Aug. 8:

LOSERS

BHEL: India’s top power equipment maker was the worst Sensex performer this week, closing 21.3 percent lower during the same period. On Monday, its shares fell 19 percent to their lowest level in nearly eight years, after its quarterly profit dropped 49 percent. Of the 48 analysts covering the stock, 29 have a ‘sell’ or equivalent rating, according to Thomson Reuters data. Morgan Stanley maintains an ‘underweight’ rating on BHEL while Ambit Insights recommends ‘sell’.

SUN PHARMAShares in the pharmaceutical company ended in the red in all four trading sessions, taking its losses for the week to 8.6 percent. This week apart, the stock continues to do well and outperformed the broader Sensex that is down 3.2 percent so far in 2013. Sun Pharma has gained nearly 38 percent this year and its stock touched a 52-week high of 581.40 rupees on July 31 after the company completed a stock split that doubled the number of its outstanding shares.

Of the 41 analysts covering the stock, 26 have a ‘buy’ or equivalent rating, Thomson Reuters data showed.

TATA POWER: The utility firm reported an unexpected net loss of 1.55 billion rupees in the April-June quarter, sending the shares tumbling nearly 15 percent to a 52-week low. The stock ended the week about 8 percent down.

“We believe the correction (in stock) is much higher than warranted, hence we upgrade the stock from Add to BUY,” according to a report by ICICI Securities. Motilal Oswal, however, maintains a ‘neutral’ rating on the stock.

HDFC: Despite gaining 2.2 percent on Thursday, India’s largest mortgage lender fell 7.7 percent this week. As of Thursday’s close, the stock is down nearly 20 percent from its 52-week high of 931 rupees hit on May 30. HDFC is down nearly 10 percent so far this year; it had gained 27.5 percent in 2012.

BAJAJ AUTO: The motorcycle manufacturer ended the week with losses of nearly 7 percent. Last week, Bajaj Auto reported an 18 percent drop in July sales. The shares have lost 16.7 percent so far in 2013, as compared to a nearly 34 percent rise the previous year. Of the 55 analysts covering the stock, 16 maintain a ‘buy’ rating, according to Thomson Reuters data.

GAINERS: Jindal Steel was the top Sensex gainer this week, ending up 11 percent. Tata Steel rose 8 percent, followed by NTPC which climbed 5.7 percent. Sterlite Industries and Coal India added 5.5 percent and 5.4 percent.

(You can follow Ankush on Twitter @ankush_patrakar and Sankalp at @sankalp_sp)

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