After rising for four consecutive weeks, the BSE Sensex fell 2.6 per cent in the last five trading sessions, as a surprise repo rate hikeby the Reserve Bank of India (RBI) on September 20 dampened investor confidence and battered banking shares.
Rate-sensitive sectors were hurt — the banking index and the realty index lost over 7 per cent in the week. Yes Bank fell 14.5 per cent, SBI lost 6 per cent while shares of DLF Ltd slumped 13 per cent.
While analysts expected the new RBI chief Raghuram Rajan to hold rates last week, expectations for monetary policy have suddenly shifted towards further tightening after the rate hike, a recent Reuters poll showed.
Here are the top losers and gainers of the week.
JINDAL STEEL AND POWER: The stock fell 9.2 per cent this week, after rising for three consecutive weeks. Shares in Jindal Steel have struggled in 2013 and are down more than 47 per cent.
JSPL’s stock has underperformed over the last one year on account of issues related to allocation of coal blocks. Selling has been further intensified due to subdued domestic steel demand and a decline in spot power realizations, IIFL said in a report on Sept. 27.
“We estimate consolidated earnings to remain flat in FY14 and then jump 20 per cent y-o-y in FY15 … the growth in earnings would take centre stage and would lead to re‐rating of the stock,” the brokerage said, while maintaining its buy recommendation on the stock with a revised price target of 276 rupees.
“We have lowered our earnings estimate over the next two years to account for the weak power prices prevailing in the country and delay in commissioning of the coal block and steel capacities.”
HDFC BANK: Shares in India’s third-largest private lender ended the week with losses of 7.5 per cent, in line with the fall in the BSE banking index.
Banking shares struggled during the week after the RBI’s repo rate hike on Sept. 20. The central bank said this week that it is still worried about high inflation.
Experts are optimistic about HDFC Bank — of the 53 analysts covering the stock, 36 have a buy or equivalent rating on it, Thomson Reuters data showed.
MARUTI SUZUKI: The country’s biggest car maker ended the week with