India Insight

Markets this week: Sensex gains 3 percent, Tata Motors surges 10 percent

October 11, 2013

The BSE Sensex rose 3 percent during the week, ending in the green for four of the five trading sessions. Improved guidance from Infosys, hopes of a U.S. deal to avoid a default on its debt and the RBI’s decision to cut a key overnight interest rate helped sentiment.

Data released on Thursday showed India’s trade deficit narrowed to a two-and-a-half-year low in September, raising hopes for a significant reduction in the country’s current account deficit.

The rupee ended at 61.07/08 per dollar, helped by good dollar sales by corporates and as emerging currencies rose with risk sentiment improving.

Here are the top gainers and losers of the week:

GAINERS

TATA MOTORS: Shares in India’s largest automaker by revenue rose 10.12 percent this week, ensuring its place as the top Sensex gainer. Tata Motors surged to a life high of 389.50 after its unit Jaguar Land Rover said in a statement that its September retail sales were up 17 percent.

The stock has gained 23.3 percent so far this year. Of the 53 analysts covering the stock, 46 have a buy or equivalent rating, Thomson Reuters data shows.

INFOSYS: Shares of India’s second-largest IT services provider ended the week with gains of 8.6 percent, hitting its highest level since January 2011 on Friday. For the year, the stock has risen 41 percent, almost in line with the near 50 percent rise in the BSE IT index.

Although its September quarter results missed estimates, the stock was boosted after the company raised the lower end of its fiscal year revenue guidance. Infosys has narrowed the range of its fiscal year revenue growth outlook to 9-10 percent from 6-10 percent.

JINDAL STEEL: The company’s shares rose 7.7 percent this week even though they ARE still down 43 percent in
2013. Sluggish growth is hurting the metals sector and the BSE metals index has lost 21 percent so far this year.

However, analysts are positive about the prospects of Jindal Steel. Data showed that of the 26 analysts covering the stock, 16 have a buy or equivalent rating while three have a sell rating.

LARSEN & TOUBRO: Shares in India’s largest construction and engineering group rose 7.5 percent in the week ending Oct. 11, earning a place among the top Sensex gainers. But L&T’s stock is still down 17.6 percent for the year as an economic slowdown continues to weigh on infrastructure spending.

“Growth in L&T earnings is not linear across quarters, contrary to perceptions. Owing to seasonality, 2Q is typically the poorest quarter … we expect this trend to continue,” BNP Paribas Securities said in a research note on October 4. The brokerage added the company will perform well in the second half of the year.

ICICI BANK: Shares in ICICI rose nearly 7 percent, taking gains for the month to 12.5 percent. Despite these gains, the bank’s stock is down 12 percent in 2013.

“While the asset quality and margin pressure may increase going ahead, we expect it to be within the manageable limits,” Sharekhan said in a research note on October 1. Of the 49 analysts covering the stock, 44 have a buy or equivalent rating, data showed.

LOSERS: With losses of 8.8 percent, Coal India was the worst Sensex performer of the week. Hindalco shares fell 3.1 percent, Sesa Sterlite lost 2.2 percent, Cipla was down 2 percent and HUL slipped 0.7 percent.

(Editing by Aditya Kalra; Follow Sankalp on Twitter @sankalp_sp and Aditya @adityayk. This article is website-exclusive and cannot be reproduced without permission)

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