Markets this week: ITC, Infosys top Sensex losers
By Sankalp Phartiyal and Ankush Arora
The benchmark BSE Sensex fell in three of five sessions this week, as higher crude prices hurt sentiment and the cabinet’s decision to delay a hike in gas prices disappointed investors. Caution also prevailed ahead of the June derivatives’ expiry on Thursday and fears of more violence in Iraq prompted investors to pare positions.
A Reuters poll on Thursday forecast the 30-share Sensex hitting 27,750 points by the end of December, following a brief correction after the budget.
For the week, the BSE Sensex ended 0.02 percent lower. Investors are now awaiting the new government’s first budget on July 10.
While investors remain hopeful of a pre-budget rally, the progress of the ongoing monsoon is key. Monsoon rains, which continue to be below average, are expected to revive early next month.
In its biannual Financial Stability Report on Thursday, the Reserve Bank said prospects of India’s economic recovery look bright following the formation of a stable government.
Here are the top Sensex losers and gainers of the week ending June 27:
ITC: Shares in India’s largest cigarette maker dropped 4.8 percent this week, taking losses since April to 9 percent.
A media report that the Modi government’s first federal budget may raise taxes on cigarettes aggressively hurt the stock.
INFOSYS: India’s no 2 software services exporter ended the week with losses of 2.8 percent. Once considered the IT industry’s bellwether, Infosys hasn’t had a great year with the value of its stock dipping 7.5 percent so far in 2014.
Infosys shares, however, closed 1.3 percent higher at 3223.40 rupees on Friday as a better-than-expected rise in quarterly revenue by Accenture sparked hopes of a robust demand environment. Indian IT companies compete with Accenture in the consulting services space.
RELIANCE INDUSTRIES: The oil & gas explorer’s shares slumped after the government deferred a decision to increase the price of locally produced gas by three months. Shares in RIL ended down 2.4 percent for the week.
Analysts, however, remain optimistic saying the move was only a temporary setback for the sector and see it as an opportunity to enter oil & gas stocks.
Moody’s Investors Services sees the hike delay as credit negative for upstream producers.
BHARTI AIRTEL: The company’s stock fell nearly 2 percent this week, making it to our list of top Sensex losers. Shares in India’s top mobile phone carrier are flat so far this year.
Of the 42 analysts covering the stock, 31 have a ‘buy’ or equivalent rating, according to Thomson Reuters data.
HINDALCO: The aluminium maker’s stock ended down 1.7 percent this week.
According to a report in the Economic Times, Crisil downgraded Hindalco’s long-term debt rating, “citing slow ramp-up of volumes at its greenfield projects, lower margins on weak aluminium prices and intense competition facing its US subsidiary Novelis.”
Two-wheeler maker Bajaj Auto is the best Sensex performer this week, closing 6.2 percent higher. Software services firm TCS jumped nearly 5 percent. Drugmakers Dr Reddy’s and Sun Pharma both gained 4.7 percent. Hero MotoCorp rose 4.1 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)