Top 20 rate-sensitive stocks that hit 52-week low on weak rupee

NEW DELHI: Rate-sensitive stocks such as banks, realty and auto came under selling pressure on Tuesday after the rupee dropped to an all-time low of 61.80 per dollar.


According to analysts, the rupee may face some resistance at around 61.85 levels, which if broken can take it below 62 levels. Some traders speculated that dollar-buying was also seen on the back of the large difference between onshore and offshore forward rates.

Reacting to the sharp fall in the rupee, benchmark indices slipped below their crucial psychological support levels. The S&P BSE Sensex corrected over 500 points in intraday trade, while Nifty slipped below 5,550.

The 50-share index closed at 5,542.25, down 143 points or 2.52 per cent. It touched a high of 5,664.90 and a low of 5,521.80 in trade today.

The S&P BSE Sensex finally closed at 18,733.04, down 449.22 points or 2.34 per cent. It touched a high of 19,131.92 and a low of 18,667.30 in trade today.

Analysts say if the rupee fails to stabilise from current record lows it will weigh on the equity markets. Most foreign institutional investors (FIIs) are taking out money from rate-sensitive stocks and buying into export-linked companies.

FIIs have pulled out over $10.5 billion, or Rs 62,000 crore, from the Indian capital market in the past two months amid concerns over the rupee, according to a PTI report released over the weekend.

Weakness in the Indian currency was instrumental in overseas investors exiting the capital markets as the rising cost of hedging a volatile rupee hurt the yield differential the FIIs work with, according to market experts.

FIIs had withdrawn $3 billion, or Rs 18,124 crore, from the debt and equities markets in July after pulling out a record $7.5 billion, or Rs 44,162 crore, in June, according to data available with market regulator Sebi.

Most analysts at top global investment banking firms have been advising clients to stay away from rate-sensitive stocks after the Reserve Bank of India (RBI) kept key policy rates unchanged.

The RBI, in its policy review earlier this week, kept its key policy rates unchanged and made it clear that its key priority is to support the rupee at the expense of spurring economic growth.

The RBI also slashed its forecast for economic growth for the current financial year to 5.5 per cent from an earlier projection of 5.7 per cent.

Last week, global investment bank Goldman Sachs downgraded its rating on Indian stocks to 'underweight' on concerns about delayed growth recovery and rising vulnerabilities for the economy.

Goldman Sachs sees limited room for re-rating unless macro conditions turn favourable, it said. The global investment bank favours export-facing sectors which may benefit from better external growth and a weaker currency and advises investors to avoid rate-sensitive and industrial sectors given cyclical pressure from rising rates and slower growth.

Goldman Sachs preferred stocks include Oil India, HCL Tech, ONGC, Bajaj Auto, Titan and Havells India.

Here is a list of top twenty rate sensitive stocks that have hit their 52-week low in trade on account of weak currency:-