India Insight

Markets this week: ICICI, Hindalco top Sensex gainers

May 9, 2014

By Sankalp Phartiyal and Ankush Arora

The BSE Sensex and the Nifty rose more than 2 percent in a week that was largely lacklustre until the main stock indexes hit fresh life highs on Friday, buoyed by optimism that India’s principal opposition party would get a majority in the ongoing election.

Security personnel stand guard as voters line up to cast their votes at a polling station at Badkoot in Kupwara district, north of Srinagar May 7, 2014. REUTERS/Danish IsmailOn Monday, India will vote in the last leg of its staggered five-week long election that began on April 7. Results are due on May 16.

India will release factory output and inflation data on Monday. According to a Reuters poll, factory output in March probably contracted for the fifth time in six months, while food and fuel prices inched higher.

“Focus will be firmly on the exit poll numbers due on Monday evening as well as on the final election results on Friday,” said Sanjeev Zarbade, Vice President – Private Client Group Research, Kotak Securities.

In the currency market, the rupee hit a one-month high of 59.9225 on Thursday. A Reuters poll showed the Indian unit will likely trade near 60.0 per dollar over the next three months before falling to 62.30 in a year.

Here are the top five Sensex gainers and losers of the week:

GAINERS

ICICI BANK: The stock rose nearly 10 percent this week, as banking shares surged on hopes that a business-friendly government led by the BJP would form the next government. India’s biggest private sector lender by assets also touched a 52-week stock price high of 1,388 rupees on Friday.

In April, ICICI Bank beat estimates to report a 15 percent rise in March-quarter profit.

The bank has replaced the Indian IT industry’s former bellwether Infosys as equity fund managers’ preferred pick, the Business Standard said citing a Morningstar India report.

HINDALCO: After falling 7.8 percent last week, the aluminum rolling company jumped nearly 9 percent in the week ending May 9.

In a research report dated May 2, IL&FS said, “we expect positive triggers in terms of free cash flow generation due to the end of the aggressive capex phase and likely improvement in LME aluminium prices in 2014f–2015f.”

In 2014, the stock has gained 17.3 percent, outperforming a 2.6 percent gain in the BSE metals index during the same period. Last year, the stock fell over 6 percent.

Of the 41 analysts covering the stock, 19 have a ‘sell’ or equivalent rating, according to Thomson Reuters data.

BHEL: Shares of the power equipment maker closed 5.2 percent higher on Friday, taking gains for the week to 7.5 percent. The stock has risen nearly 10 percent in 2014.

Of the 48 analysts covering the stock, 33 have a ‘sell’ or equivalent rating, according to Thomson Reuters data.

RELIANCE INDUSTRIES: Shares of the energy conglomerate rose 7.4 percent, snapping two consecutive weeks of falls.

In 2014, the stock has risen 11.5 percent, trailing a 14.3 percent gain in the BSE oil and gas index.

The Election Commission has rejected petroleum minister Veerappa Moily’s proposal to increase natural gas prices before the model code of conduct ends on May 16, news reports said on Monday.
RIL’s top executive wrote to the oil secretary last week, requesting that the official announcement of higher gas prices be made once voting gets over, the Economic Times reported.

TATA STEEL: Shares of the steelmaker rose 6.7 percent this week, after registering a loss of over 8 percent last week.

In 2014, the stock has lost 1.5 percent, underperforming a 2.6 percent gain in the BSE metals index.

Of the 45 analysts covering the stock, 27 have a ‘buy’ or equivalent rating, according to Thomson Reuters data.

LOSERS

Telecom carrier Bharti Airtel was the biggest Sensex loser this week, closing 4.8 percent down. India’s number two IT services provider Infosys slumped 3.6 percent, followed by Wipro, which lost 2.9 percent. HDFC ended down 2.7 percent while Cipla and TCS both dropped 2.2 percent.

(Editing by Tony Tharakan; Follow Tony on Twitter @TonyTharakan, Sankalp @sankalp_sp and Ankush @Ankush_patrakar | Disclaimer: This article is website-exclusive and cannot be reproduced in any form without permission)

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