It was a good week for Indian shares as the BSE Sensex gained 1 percent to close at 20,149.85, after the index touched a near two-month high during trade on Friday. The rupee gained for the second week and ended at 59.35/36 after rising 0.3 percent. Markets reacted negatively on Tuesday to the Reserve Bank’s moves to tighten liquidity in the system in a bid to support the weak rupee. However, Prime Minister Manmohan Singh said on Friday that these steps may be temporary.
Bank of America-Merrill Lynch expects the Sensex to remain range-bound with limited upside of 5 percent until regional elections in mid-November. The bank recommends investors to be ready to buy on dips at levels of 19,000-19,300. This was the fourth consecutive week of gains for the benchmark index and it is not too far from its 2013 high of 20,443.62 hit on May 20. However, traders are still worried as foreign investors have been net sellers for the last four sessions. Here are the top five Sensex gainers and losers of the week that ended on July 19.
Hindustan Unilever (HUL): Defensive stocks, which tend to do well in an uncertain market environment, surged during the week on growth prospects. Consumer goods maker HUL emerged as the best performer with gains of 14 percent, hitting a life high of 719.10 rupees on July 18.
The stock has had a good run this year, gaining more than 30 percent. However, 21 of 41 analysts covering the stock have a ‘sell’ or equivalent rating, while 14 have a ‘hold’, Thomson Reuters data showed. BofA-ML has HUL among its top sells.
Tata Consultancy Services (TCS): Shares of India’s largest software services exporter rose 8.5 percent this week after the company posted better-than-expected results on Thursday. The stock is now up almost 40 percent this year, outperforming the 25 percent gain in the BSE IT sector sub-index. The results were driven by its highest sales volume growth in seven quarters and CEO N Chandrasekaran reiterated his view that the company will grow faster than the industry.
HSBC said in a note on July 19: “We expect the demand environment to improve through the year for the IT sector and valuations to gradually increase. We expect TCS to maintain its above-average growth rate and its premium” Bharti Airtel: The telecom firm was among the top five Sensex performers of the week after posting gains of 8.23 percent. India approved raising the foreign investment cap in the telecoms sector to 100 percent from 74 percent on July 16.
Analysts are optimistic about the Bharti stock, which has gained more than 13 percent this month. Data showed that 33 of 45 analysts covering that stock have a ‘buy’ or equivalent rating, while eight have a ‘hold’.
ONGC: Shares in the company rose 6.75 percent, taking its gains for the year to 18 percent. CLSA sees a 20 percent rise in ONGC share price on factors such as the continuing hikes in monthly diesel prices. However, it added that the government’s promise to limit the burden of its recent gas price hike has forced investors to worry over the possibility of a higher subsidy burden for companies such as ONGC.
ITC: This was another stock from the consumer goods space which did well during the week, ending 5.5 percent higher after hitting a record high on July 18. “We believe ITC‘s revenue growth will remain steady,” ICICI Securities, which has an ‘Add’ rating on the stock with a target price of 372 rupees, said in a research note on July 16. According to Thomson Reuters data, 30 of 40 analysts covering the stock have a ‘buy’ or equivalent rating. The stock has gained 28.6 percent in 2013 so far.
LOSERS: ICICI Bank, India’s largest private sector bank, was the top Sensex loser this week with losses of around 10 percent. Tata Steel lost 8.2 percent, while Sterlite and BHEL lost between 6 – 7.5 percent. HDFC was also among the top losers, ending down 5.45 percent.