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India shares post weekly gains as ICICI Bank rises after management reshuffle

Hindalco, Vedanta among major losers amid trade-war concerns

MUMBAI (NewsRise) -- Indian shares edged higher this week as gains in ICICI Bank after a management reshuffle helped offset a downturn in regional equities prompted by intensifying trade frictions between China and the U.S.

The BSE Sensex rose 0.2% and the Nifty 50 Index added less than 0.1% this week. On Friday, the indexes advanced 0.7% to 35,689.60 and 0.8% to 10,821.85, respectively, wiping out the losses accumulated through Thursday.

ICICI Bank was the top performer this week, rising 6.6% after a top management restructuring. As part of the reshuffle, the current Chief Executive Chanda Kochhar is taking leave till an internal enquiry against her for alleged irregularities in giving loans to Videocon Group.

Demand for heavyweights HDFC Bank and Housing Development Finance Corp. too helped cushion the Sensex from weakening regional risk appetite amid expanding trade tensions. HDFC Bank rose 2.5% and HDFC advanced 3.9% for the week.

China and Hong Kong paced losses in Asian markets this week after U.S. President Donald Trump raised the stakes in Washington's trade war with Beijing. On Monday, Trump threatened to impose tariffs on additional $200 billion worth of Chinese goods if Beijing carried through with its pledge to levy duties on U.S. products. China last week had said that it would impose additional duties on imports from the world's largest economy in response to a similar move by Washington.

China's benchmark index declined by 4.4% this week and Hong Kong's dropped by 3%. The Nikkei Asia300 Index of companies outside Japan fell more than 3%.

"Suddenly the odds of a full-blown trade war have increased and markets, which have been relatively complacent up to this point, took notice," Anthony Chan, chief Asia investment strategist at Union Bancaire Privee, said in a note. "A more uncertain business outlook will likely curb new business expansion and corporate capex spending plans in the coming few quarters."

Among major losers this week, aluminium and copper producer Hindalco Industries tumbled 6.4% and miner Vedanta dropped 4.2% amid concerns that rising trade tensions could damp demand for industrial commodities. State-owned Oil and Natural Gas Corp. has fallen 3.6% since last Friday amid worries that the world's top oil producers could raise production at a meeting in Austria. UPL was the worst performer on the Nifty index this week, falling 8.2%. On Tuesday, Bloomberg reported that a consortium including UPL is in exclusive talks to acquire Bill Ackman-backed Platform Specialty Products' agricultural pesticides business, which could fetch more than $4 billion including debt.

The Sensex's performance this week was "decent enough" considering the extent of losses in other Asian markets, said Akash Jain, vice president of research at Mumbai-based Ajcon Global. He attributed the outperformance to India's economy being less vulnerable to a slowdown in global growth as a result of the trade frictions. Jain said that primary focus of Indian investors was currently on the progress of the monsoons and how the June quarter earnings pan out.

On Friday, ICICI advanced 1.3%. HDFC Bank gained 1.2%, and HDFC climbed 2.5%.

Hindalco edged 0.1% lower, and Vedanta and ONGC declined 0.2% each. UPL fell 1.1%.

Tata Steel advanced 0.4% on Friday. Jefferies said that after recent underperformance, concerns over whether the planned merger of Tata Steel's European operations with Germany's ThyssenKrupp would proceed are likely partly factored in and risk-reward appears balanced.

   Cipla advanced 2.1% to 614 rupees. IDFC maintained its 'outperform' rating and 639 rupees target price on the stock, citing momentum in the company's U.S. business after two new drug approvals.

--Nimesh Vora

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