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Asia300

India shares rise for second week as drug makers recover

MUMBAI (NewsRise) -- Indian shares rose for a second straight week after closing little changed on Thursday, as stocks of drug makers rebounded. Investor attention was also focused on Infosys as the company grapples with top management changes.

The benchmark BSE Sensex and the NSE's Nifty 50 index advanced 0.2% each for the week. On Thursday, both the indices closed 0.1% higher, at 31,596.06 and 9,857.05, respectively. Drugmaker Lupin gained 5.4%, leading a gauge of pharmaceutical stocks 2.2% higher. India's financial markets are closed on Friday for a local holiday.

"Pharma stocks bounced back as they had bottomed out," said Akash Jain, vice president for equity research at Ajcon Global Services. "Infosys is in the limelight after its CEO's sudden resignation last week."

Jain said he expects the Nifty index to trade in a 9,700-9,900 range next week.

Among other drug makers, Dr. Reddy's Laboratories climbed 5.3% for the week, while Cipla ended 1.4% higher. On Thursday, the stocks ended up 2.9% and 2.5%.

Infosys, the country's second-biggest software exporter, recovered some lost ground to end more than 2% higher on Thursday, its third day of gains. For the week, the stock fell 1.1%. According to media reports, Nandan Nilekani, Infosys' co-founder, is likely to return to helm the company after Vishal Sikka quit as chief executive on last Friday.

Since Sikka announced his sudden resignation, Infosys, also listed in the U.S., has seen $4.5 billion getting wiped off from its market capitalization, despite announcing a $2-billion share buyback plan on Saturday at a 25% premium to the previous closing price. According to media reports, capital market regulator, the Securities and Exchange Board of India, has questioned the share price fall, while co-chairman Ravi Venkatesan is said to have met with Finance Minister Arun Jaitley. U.B. Pravin Rao, a long-time company veteran, is now the interim CEO. Infosys board has said it will appoint a new CEO by March.

Among other key weekly movers, Bharti Airtel, India's biggest mobile phone operator, gained 2.7%. An inter-ministerial group set up by the government to look into the financial woes of telecom companies is expected to suggest increasing the time for deferred spectrum payment to 16 years, according to media reports.

Tata Steel advanced 2.2% for the week .The company expressed interest in bidding for debt-ridden Essar Steel, Economic Times reported. It ended 0.9% higher on Thursday.

Most state-run banks ended higher for the second straight day after the federal cabinet on Wednesday approved a plan for consolidation of state-owned lenders. Finance Minister Jaitley said a ministerial panel will be formed to supervise merger proposals from banks' boards and the objective of the planned consolidation was to create stronger banks.

On Thursday, Punjab National Bank added 1.1%, taking two-day gains to 4.4%, while Bank of Baroda ended up 1.4%, adding to the 1.1% gain in the previous session. For the week, Punjab National rose 1.2%, while Bank of Baroda fell 2.9%.

Engineering and construction company Larsen & Toubro gained 0.6% on Thursday. Schneider Electric and Eaton have emerged as top contenders to acquire L&T's electric and automation division for as much as 170 billion rupees ($2.65 billion), the Economic Times reported.

Consumer goods company Dabur gained 0.5% to 299.85 rupees on Thursday. Nomura lifted the target price to 345 rupees from 320 rupees.

--Dhanya Ann Thoppil

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