Sector check! sectors that are away from their May 10 high

Even while the markets are trying to cross the next barrier- 13k, sectoral indices have been under performing. Sectors excluding, BSE IT and BSE teck have all been performing weak and are still away from their May 10 high. 

While the Sensex is hovering around 12,700 levels, which is higher than the May 10 level of 12612.38, majority of the indices are not anywhere near their high.

Sectors like auto, capital goods, consumer durables, FMCG, healthcare, metal, midcap, PSU, smallcap are away from their May 10 high by 7.87%, 7.23%, 8.61%,11.81%, 10.84%, 20.65%, 12.71%,11.20%, and 18.52% respectively. BSE IT and tech are the only two sectors which have earned a return of 15.80% and 13.79% respectively. 

When we look sector wise, most of the top leading companies in each sector have given negative returns between May 10-Oct 19. For example the leading companies like Ashok Leyland, Bajaj Auto in the auto sector and Hindustan Zinc, Jindal Stainless in the metals sectors have not gained during this period.

Weak volumes can be a factor for these sectors underperformance. Volumes of these sectors except, pharma, IT, metals, have also fallen in the above-mentioned period.

BSE auto has seen a 27% drop in volumes, capital goods-33.12%, consumer durable- 36.59%, FMCG- 8.69% midcap- 55.54%, oil&gas- 51.72%, PSU-57.52%, smallcap- 49.58%, tech-41.43%. 

Surprisingly, the only two sectors that have underperformed in terms of stock price but have shown positive figures in terms of volumes are pharma and metals. Volumes of metal and the pharma sector have risen by 68.57% and 59.12% between May 10-Oct 19, indicating that investors have been buying cheaply valued stocks in these sectors.

BSE IT is the hot favourite of retail investors. It is not only one of the very few sectors that have come back to their May 10 level and also outperformed, but its volumes have also grown by 37%.

By-Piyu Sen