Ditch roses, buy largecaps below Rs 500/sh this Valentine's Day

On Thursday, Rs 3 lakh crore was wiped out from market with the Sensex losing 800 points down in a single day, marking the biggest single-day fall in 6 months. The Nifty breached 7000 mark for the first time in 21 months. From January, the 50-share index has lost nearly 1000 points.

February 12, 2016 / 22:36 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Moneycontrol Bureau

As bears are smearing Dalal Street with red blood, the town, too, is painted red. And that red is the colour of love celebrating Saint Valentine's birthday in February. Well, the love affair of equity markets with Budget is yet to spark this time as Europe and Asian markets play villains, why not make most of the bloodshed. On Thursday, Rs 3 lakh crore was wiped out from market with the Sensex losing 800 points in a single day, marking the biggest single-day fall in 6 months. The Nifty breached 7000 mark for the first time in 21 months. From January, the 50-share index has lost nearly 1000 points.

Banks were the biggest culprits once again as the index is down 25.60 percent in 6 months and 12.80 percent lower in a one month. Madhusudhan Kela, Chief Investment Strategist, Reliance Capital says that the meltdown in share prices is providing an excellent entry point for investors looking to buy high quality names. "Don't go ahead and buy everything at one go," cautions Kela, but advises investors to start accumulating stocks from a two to three year perspective.While the valuations have become cheap due to current volatility, the market even at 14x PE multiple is not looking cheap, says CNBC-TV18’s Consulting Editor Udayan Mukherjee. A 20 percent fall from the peak qualifies as a bear market technically, he adds.

Bluechips like Tata Motors, Tata Steel, SBI, ITC, BHEL and Coal India are reeling under after disappointing December quarter results. Bad loans or asset quality are causing a lot of trouble for government-run banks. SBI reported a massive 67 percent fall in consolidated net profit at Rs 1259.49 crore in the quarter to December after it classified loans worth Rs 20692 crore as bad loans.

Persistently weak steel prices are dragging companies like Tata Steel's financial performances. Moody's downgraded credit ratings of Tata Steel on a weaker-than-expected operating performance in its key operating markets of India, Europe and Southeast Asia on account of persistently weak steel prices.Capital goods companies are struggling to meet its order book. BHEL posted a massive loss of Rs 1,102 crore in October-December quarter against profit of Rs 212.6 crore in year-ago period. Outstanding order book at the end of December 2015 was at Rs 1,09,201 crore, increased by 5 percent over Rs 1,03,900 crore in year-ago period. Orders worth Rs 3646 crore excluded from the outstanding order book, which are not likely to commence and this has no impact on revenue, BHEL said in its filing.