September is turning out to be a good month for Indian stock markets, as key stock indexes extended gains in the last four sessions - Larsen & Toubro (L&T), Tata Power shares led the gainers list. Monday was a market holiday.
The BSE Sensex gained 2.4 per cent, while the broader Nifty rose nearly 3 per cent as foreign institutional investors (FIIs) extended buying into Indian equities. A recovery in the rupee, which posted its best week in 15 months, also boosted sentiment.
Profit-taking dented markets mid-week as caution also prevailed ahead of a series of macroeconomic events scheduled next week, including August inflation data due on Monday and the likelihood of US Fed's decision to announce a reduction in its monetary policy stimulus. RBI will review its policy on September 20.
Here are the top gainers and losers of the week:
Larsen & Toubro (L&T): Shares of India’s largest engineering and construction conglomerate surged during the week, ending 10.6 per cent higher as the best Sensex performer. The stock outperformed the BSE capital goods index during the same period, which rose 8 per cent.
On Friday, capital goods shares gained after data on Thursday showed industrial production unexpectedly rebounded in July. Capital goods production rose for the first time in four months in July, posting annual growth of 15.6 per cent.
Goldman Sachs has added L&T to its ‘conviction buy’ list, citing attractive valuations, visible growth, strong balance sheet and a good track record of execution. Of the 47 analysts covering L&T, 34 have a ‘buy’ or equivalent rating on the stock, according to data.
Tata Power Ltd: Having lost nearly 30 per cent in 2013, the power company’s shares closed 10.4 per cent higher in the week ending September 13.
Moody’s said on Thursday the utility firm is among the companies that could see the quality of its debt fall as higher borrowing costs and weaker rupee hurt. But S&P had downgraded the stock last week on weak cash flows with a negative outlook.
Analysts seem to be divided on the stock. Of the 36 analysts covering the stock, 18 have a ‘buy’ or equivalent rating and 11 recommend a ‘hold’.
Mahindra & Mahindra Ltd: Shares of India’s biggest utility vehicle manufacturer gained 7.6 per cent in the week. The stock has struggled