India Insight

Tracking Sensex: Top losers, gainers of the week

Indian shares ended in the green in three of five trading sessions but jittery market reaction to the U.S. Federal Reserve’s announcement of a gradual end to its $85 billion bond-buying stimulus took the BSE Sensex down 2.1 percent for the week. The broader 50-share Nifty lost 2.4 percent.

The U.S. central bank’s monetary programme has been a source of easy money for emerging markets such as India that used FII inflows to finance its current account deficit. The possibility of a liquidity drought and a consequent selloff by foreign investors spooked the markets with the rupee plummeting to a record low of 59.98 against the dollar on Thursday.

China factory activity, which shrunk to a nine-month low, also alarmed Asian markets this week.

Here’s a look at the top five Sensex losers of the week.

JINDAL STEEL AND POWER (JSPL): Shares in JSPL ended 15.7 percent down this week, making it the worst Sensex performer. With Friday’s close of 204.25 rupees, the stock has lost 57.4 percent from its 52-week high of 480 rupees hit on July 5, 2012. According to Thomson Reuters data, 17 of the 28 analysts covering the stock have a buy or equivalent rating, while four have a sell rating.

HINDALCO: Next among the losers was copper producer Hindalco that fell 9.7 percent in the week ending June 21.  The stock, which ended in negative territory in four of the last five sessions, has lost 28.3 percent so far this year.

Death toll in Uttarakhand monsoon floods crosses 150

Thousands stranded in parts of northern India awaited rescuers on Wednesday as floods caused by heavier-than-usual monsoon rains killed at least 150 people in worst-hit Uttarakhand.

Prime Minister Manmohan Singh announced a 10-billion-rupee aid package for the state after he and Congress president Sonia Gandhi did an aerial survey of the flood-hit region.

“The government will not spare any effort in rescue and relief operations,” Singh said on his official Twitter account, adding the large-scale devastation they witnessed was “most distressing”.

Tracking Sensex: Top losers, gainers of the week

By Ankush Arora and Aditya Kalra

Gains of 1.9 percent on Friday helped the Sensex recover some of its losses but the benchmark still ended down 1.3 percent for the week. The index ended in the red for three of five trading sessions this week.

Indian markets largely ignored Fitch’s rating outlook upgrade and Finance Minister P. Chidambaram’s pledge to do more for the economy. Ahead of Monday’s Reserve Bank of India policy review, data showed May inflation stood at 4.7 percent. However, recent weakness in the rupee and a high current account deficit are some of the factors that dampen hopes of a rate cut.

Here are the top five Sensex losers of the week:

JINDAL STEEL AND POWER (JSPL): Shares in JSPL, which ended with losses of 13.21 percent this week, were battered after the Central Bureau of Investigation registered a case against the company over coal mining rights. Shares of the company, controlled by Congress MP Naveen Jindal, have had a rough year so far, losing more than 45 percent.

Markets struggle: At least 100 stocks hit 52-week low on NSE

Indian markets struggled in trade on Thursday with the Sensex falling more than 200 points while the Nifty sank over 50 points. Weak Asian markets also weighed as the Nikkei slumped more than 800 points on worries the U.S. Fed would trim its stimulus programme in the coming months.

The rupee also remained weak, trading below 58 versus the dollar, as Finance Minister P. Chidambaram did not announce any concrete steps to arrest its fall.

At least 100 stocks had touched their 52-week low on the National Stock Exchange (NSE) during trade, data showed. Here’s a look at some stocks that hit a one-year low during Thursday’s trade:

Fitch revises India outlook; recent views of other rating agencies

Fitch Ratings revised India’s sovereign rating outlook to “stable” from “negative” on the back of measures taken by the government to contain the budget deficit, it said in a statement on Wednesday. The rating agency had cut India’s outlook to negative in June 2012 and currently has a BBB- rating for the country.

“Fitch expects the government to broadly meet its FY14 budget deficit target of 4.8 percent of GDP (including privatisation receipts) and to gradually reduce the high level of public debt over the medium-term,” the rating agency said.

An acceleration in economic reforms that leads to a material improvement in potential growth rate consistent with stable consumer price inflation and external balance could be one of the factors that could trigger a positive rating action, it added.

The biggest losers in India’s economic slowdown

(Any opinions expressed here are those of the author and not those of Thomson Reuters Corp.)

The reaction to news that India’s economy grew at its slowest rate in over a decade was predictable. There was frustration over squandered potential, pleas for a rate cut, unshaken optimism and even an opportunity to indulge in clever wordplay. Yet as everyone from economists to businessmen had their say, the demographic affected most by this slowdown was silent – India’s poor.

One of the big successes of India’s economic growth has been its positive impact on poverty reduction. The percentage of the country’s population living below the poverty line declined from 37.2 percent in 2005 to 29.8 percent in 2010 (the last year when exact numbers were available). That translates to 52 million Indians who have been lifted above the poverty line. Encouraging as those gains are, the country still counts over 320 million poor among its citizens.

L&T Infra Finance CEO upbeat on India’s economic recovery by 2015

India’s economy recorded its slowest growth in a decade in the fiscal year ending in March but the CEO of L&T Infrastructure Finance, that provides loans to companies such as Jaypee Group to develop roads and other infrastructure, is hopeful of an economic turnaround in less than two years that will boost business prospects.

The company, part of India’s largest engineering and construction conglomerate Larsen & Toubro, will likely end up dealing with a slowdown in business growth in the current financial year, but might bounce right back next year if the winner of India’s federal elections due in 2014 starts spending on infrastructure projects.

Reuters spoke to Chief Executive Officer Suneet Maheshwari about his outlook for the industry and the Indian economy. Here are excerpts from the interview:

In a mixed year for lenders, IndusInd Bank shines

Rate cuts by the Reserve Bank of India, new bank licence norms, bad loan worries and money laundering accusations – Indian banks are firmly in the public eye in 2013.

Going by stock returns, lenders have had a mixed year so far. The BSE banking sub-index has gained less than 1 percent, as compared to the benchmark Sensex’s return of nearly 3 percent. Big banks such as the State Bank of India have lost 13 percent while HDFC Bank has gained around 4 percent. Some smaller players have struggled, with IDBI and Bank of Baroda falling more than 20 percent.

Small private lender IndusInd Bank, which focuses on retail lending, has been the star performer with gains of around 25 percent, making it the best performing stock in the 14-share banking index in 2013, data showed.

Smokers ignore India’s public smoking ban

(Any opinions expressed here are those of the author and not necessarily those of Thomson Reuters Corp.)

It’s been nearly five years since India banned smoking in public places, but you wouldn’t know it from talking to Sugandha. The jeans-clad woman in her twenties is standing at a subway entrance in New Delhi as a man smokes a cigarette a few steps away, indifferent to how the fumes annoy passersby.

“We can’t say anything to anyone,” she said. “They won’t take it positively.”

India GDP: What the economists are predicting

Investors and policymakers will be closely watching India’s fourth-quarter and full fiscal year 2012/13 gross domestic product (GDP) growth figures on Friday.

The economy grew 4.5 percent in the December quarter, but a Reuters poll has shown that Asia’s third-largest economy will likely perform a little better and expand by 4.8 percent in the quarter that ended in March.

For the financial year 2013, the government had estimated the economy will grow 5 percent, the lowest in a decade. However, if the poll consensus proves right, full-year growth will be worse than the government’s estimate.

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