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Last Updated : Jul 13, 2019 08:22 AM IST | Source: Moneycontrol.com

Budget proposal hits D-St sentiment; 18 stocks in BSE500 index fall 10-20%

The average market capitalisation of BSE-listed companies fell from Rs 151.35 lakh crore recorded on July 5 to Rs 148.08 lakh crore seen on July 12 which translates into a fall of Rs 3.27 lakh crore.

Kshitij Anand @kshanand

The much-awaited budget from the Modi 2.0 government failed to revive the animal spirit on D-Street as benchmark indices fell about 2 percent for the week ended July 12.

Investors lost over Rs 3 lakh crore in just five trading sessions. The average market capitalisation of BSE-listed companies fell from Rs 151.35 lakh crore recorded on July 5 to Rs 148.08 lakh crore seen on July 12, which translates into a fall of Rs 3.27 lakh crore.

The budget proposed by the finance minister last week had all the ingredients to take India towards a $5-trillion economy. But, the absence of any short-term measure and higher taxes on the super-rich, which would affect foreign investors as well as high net worth individuals, hurt sentiment.

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The market which was running at the peak of its valuations hit a roadblock last week, and it fell under its own weights led by losses in largecaps. But, the bigger carnage was seen in the broader market.

Some of the index stocks which witnessed a decline include names like TCS, HDFC Bank, Nestle India, Maruti Suzuki, L&T, Titan Company, ICICI Bank, State Bank of India, Bharti Airtel, Wipro, Tata Motors, etc. among others.

“Markets started the week on highly disappointed sentiments and Nifty registered the biggest one-day crash since last few years. Although pundits had claimed Budget as the reason, but, the weight of high valuation itself had caused such a dramatic decline in the index,” Jimeet Modi, Founder & CEO - SAMCO Securities & StockNote ,told Moneycontrol.

“The Nifty50 currently trades at a P/E of 29x which is at its all-time high. Under such circumstances, when the Budget didn’t give any immediate short-term growth boosters, naturally the markets had to react negatively,” he said.

The S&P BSE Sensex fell 1.97 percent while the Nifty50 saw a decline of 2.1 percent, compared to 2.58 percent fall seen in the S&P BSE Smallcap index and about 1.17 percent downtick witnessed in the BSE Midcap index.

Almost 370 stocks in the S&P BSE 500 index gave negative returns for the week ended July 12, and about 18 of them fell 10-20 percent. Those include names like Jet Airways, Sadbhav Engineering, MindTree, REC, Dilip Buildcon, Jaiprakash Associates, Indiabulls Ventures, HEG, Titan Company, etc. among others.

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What to watch out for the coming week:

Well, the coming week is likely to be dominated by macro triggers as well as earnings. The market moved in a narrow range in the week gone by, and the coming week is unlikely to be any different. At the lower end of the range, the crucial support for the index is placed at 11,460 levels.

On July 15 morning, D-Street would react to CPI data for the month of June and IIP data for the month of May. Retail inflation rose during the month of June 2019, reaching an eight-month high of 3.18 percent

India's industrial output softened to 3.1 percent month-on-month (MoM) in May from 3.4 percent April, according to the Index of Industrial Production (IIP) data released on July 12.

In the coming week, investors would watch out for WPI Inflation (YoY) for June on July 15. On the earnings front, more than 70 companies will declare their results for June quarter which include names like MindTree, Wipro, ACC, Colgate Palmolive, Dabur India, RIL, and HDFC Bank.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Jul 13, 2019 08:22 am
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