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India shares post 2nd week of losses as rupee slumps to record low

Bharat Petroleum, Hero MotoCorp among losers on rising fuel prices

MUMBAI (NewsRise) -- Indian shares fell for the second straight week, weighed by concerns over the rupee as the currency hit record lows against the U.S. dollar.

The benchmark BSE Sensex declined 0.8% this week, falling the most in four months, and the Nifty 50 Index dropped 0.6%. On Friday, the gauges rose 1% to 38,090.64 and 1.3% to 11,515.20, respectively.

Earlier in the week, the Sensex fell to as much 37,342 - the lowest in six weeks -- as the rupee slipped to a fresh record low of near 73 against the dollar following a faster-than-expected U.S. wage growth data and continued concerns over India's current account deficit. The benchmark gauge managed to recover after media reports said that Indian policymakers may announce measures to support the currency over the weekend.

The Indian rupee, too, recovered following the reports. After having fallen to 72.92 on Tuesday, the rupee rebounded to 71.51 against the U.S. currency and was last trading at 71.96.

Meanwhile, data released late Wednesday showed that retail prices in India rose by 3.69% last month, the slowest in 10 months and lower than the 3.86% median forecast of economists in a Reuters poll. August's print was slower than the 4.17% reading in July and below the nation's rate-setting committee's inflation target.

Regional indexes were buoyed by a U.S. invitation to Chinese officials for resuming high-levels talks amid the ongoing trade spat between the two nations. The invite comes after a recent escalation in the trade dispute between the world's two largest economies after U.S. President Donald Trump last week said his administration was ready for another round of tariffs on Chinese goods and threatened to tax all imports from the Asian nation.

Bharat Petroleum paced losses in fuel retailers this week, falling 0.4%, in the wake of Brent crude prices heading for a third weekly advance in four weeks. Hero MotoCorp led the losses in two-wheeler makers, falling 4.2%, on concerns that rising domestic fuel prices and prospects of rising local interest rates may hurt the company's profitability. Tata Motors declined 4% after CEO of its U.K. unit Jaguar Land Rover warned that a wrong Brexit deal could hurt jobs and production.

Most software exporters outperformed this week as a weaker rupee brightened their earnings prospects. Jefferies said the rupee's fall was "a significant tailwind for IT services companies," raising earnings-per-share estimates and target prices by up to 10%. Infosys and Wipro added up to 1.9% this week.

On Friday, zinc miner Vedanta advanced 5.3% and aluminum producer Hindalco Industries rose 3.3% after the U.S. invitation to China for talks boosted global industrial commodity prices.

Sun Pharmaceutical Industries added 2.3% and Lupin advanced 1%. The U.S. drug regulator approved Sun Pharma's eye speciality drug and Lupin's oral suspension used for treatment of a type of pneumonia, according to exchange filings.

Shares of sugar companies rose for the second straight session after India's Cabinet Committee on Economic Affairs approved a 25% increase in ethanol prices. Reports of government considering raising minimum selling price of sugar also buoyed the stock. Shree Renuka Sugars jumped 16.2%, Dhampur Sugar surged 19.8%, and Bajaj Hindustan climbed 19%.

--Nimesh Vora

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