Sensex up; rupee weakens further
February 12 2016 08:12 PM


Indian stocks swung between gains and losses, with the benchmark gauge capping its biggest weekly loss in more than six years after it entered a bear market on Thursday.
Bharat Heavy Electricals, the top power-equipment maker, plunged the most since August 2013 after posting a surprise loss. Oil & Natural Gas Corp tumbled to a seven-year low after reporting a second quarterly drop in net income. Sun Pharmaceutical Industries gained after its profit exceeded estimates. Mahindra & Mahindra rose the most in three weeks. Bharti Airtel was the only stock on the S&P BSE Sensexto rise this week.
The Sensex added 0.2% at the close, extending the week’s loss to 6.6%, the steepest since the period ended July 10, 2009. Volumes on the NSE Nifty 50 Index were 67% more than the 30-day average. The Sensex tumbled into a bear market on Thursday, joining benchmarks from Tokyo to Frankfurt, after tumbling 23% from its January 2015 record. Global funds have pulled $2.1bn from local shares this year as investors turn averse to riskier emerging-market assets.
“There are risks in the global market and with the rupee depreciating fast, a selloff is possible,” A K Prabhakar, head of research at IDBI Capital Capital Market Services, said in an interview with Bloomberg TV India. “Don’t be in a hurry to buy stocks.”
Globally equity markets rebounded after a torrid week when investors questioned whether central banks have the tools to shore up the global economy. Federal Reserve Chair Janet Yellen in a second day of testimony said the Fed was assessing the impact of the swings in the markets on the economy but she doubted that would prompt it to reverse course and cut rates. Investors will be watching US data on retail sales and consumer confidence to gauge how America is weathering the global slowdown.
Oil & Natural Gas tumbled 4.9% to Rs193.3, its lowest level since March 2009. The company reported after trading ended on Thursday its lowest quarterly profit in more than 15 years following the slump in crude prices. Bhel plunged 13% to its lowest level since August 2013. The stock has lost 38% of its value this year.
Sun Pharmaceutical added 2%. Net income for the quarter ended December 31 was Rs14.2bn ($208mn), beating the average estimate of Rs12.8bn from 25 analysts surveyed by Bloomberg.
Mahindra & Mahindra jumped 3.4%, the most since January 22, after its third-quarter sales met analyst estimates. Bharti rallied 5.1%, the most since May 29. The stock climbed 5.7% this week.
Sixteen of the 30 Sensex companies, or 53%, that have reported earnings for the December quarter so far have beaten estimates. That compares with 57% in the quarter ended Sept. 30, data compiled by Bloomberg show.
Meanwhile the rupee completed its biggest weekly decline since mid-January as overseas funds fled the nation’s stocks amid a global equity rout.
The currency is Asia’s worst performer this year after South Korea’s won amid renewed concern about the health of the world economy and dwindling investor confidence in Prime Minister Narendra Modi’s ability to push through economic reforms.
“It’s really all about the weak risk sentiment globally and the weakness in domestic equities,” said Divya Devesh, Singapore-based Asia foreign-exchange strategist at Standard Chartered. “If we do see some stabilisation in risk from here, we will see a pullback in the rupee as well.”
The rupee retreated 0.9% this week to 68.2350 a dollar in Mumbai, according to prices from local banks compiled by Bloomberg. It fell to as low as 68.4725 yesterday, near a record low of 68.845 seen in August 2013.
The currency’s one-month implied volatility, a gauge of expected swings used to price options, surged 86 basis points this week, the most since August, to 7.78%.

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