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Last Updated : Sep 20, 2019 10:05 AM IST | Source: Moneycontrol.com

Sensex down 4000 points since June, nearly 300 BSE500 stocks take 10-70% hit

The index is just 25 points away from turning negative for the year 2019, and has fallen 4,219 points or little over 10 percent from its record high of 40,312 registered in June 2019.

Kshitij Anand @kshanand
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Bears continue to dominate D-Street and have pushed benchmark indices lower amid muted global as well as domestic cues. Nifty50 has wiped out gains of the year 2019, the S&P BSE Sensex is not very far off.

The index is just 25 points away from turning negative for the year 2019, and has fallen 4,219 points or a little over 10 percent from its record high of 40,312 registered in June 2019.

On Thursday, S&P BSE Sensex plunged 470 points to 36,093. Investor wealth dropped by Rs 1.65 lakh crore on the day as equities witnessed heavy sell-off.

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Benchmark indices kept on breaking their crucial support levels since June, but the big carnage was seen in the individual stocks especially in the small & midcap space.

As many as 296 stocks in the S&P BSE 500 index fell 10-70 percent since June 4th which include names like Jet Airways, Reliance Capital, Coffee Day, Vodafone Idea, DHFL, Reliance Power, HDFC Bank, Jaiprakash Associates etc. among others.

About 50 percent of the Sensex stocks have fallen in double digits from June 4th, data from AceEquity showed. As many as 15 stocks in the S&P BSE Sensex plunged 10-60% which include names like RIL, L&T, M&M, ONGC, Tata Steel, Axis Bank, Tata Motors, HDFC Ltd, HDFC Bank, and YES Bank.

Sensex returns since June 4

What led to the fall?

On the global front, slightly hawkish commentary from the US Federal Reserve, persistent selling by foreign investors has dismayed investors.

At home, muted direct tax collections have fuelled fears of a slowdown and dashed hopes of any stimulus from the government thereby hurting investor sentiment, suggest experts.

Foreign investors have pulled out about Rs 3,000 cr from Indian equity markets in this week and over Rs 8,000 cr so far in September, and over Rs 40,000 cr since June from the cash segment of Indian equity markets.

"Continuous selling by FIIs and uncertainty over the future trajectory of FED rate cut dampened investors’ sentiment,” Vinod Nair, Head of Research, Geojit Financial Services Ltd told Moneycontrol.

“Slowdown in the direct tax collection and rise in oil prices will limit government’s space for stimulus measures which will continue to act as a downside risk to the market,” he said.

Where to put the money?

The recent selloff in the market could be attributed to both local as well as global factors. And, the recent selloff has made valuations look reasonable.

The CNX Midcap 100 index trades at 10 percent discount to Nifty/Sensex as against 15-20% premium about a year back, Sharekhan said in a note. Investors who are looking to generate alpha over the index returns should bet on small & midcaps, suggest experts.

Manish Gunwani, Chief Investment Officer of equity investments at Reliance Nippon Life AMC in an interview with CNBC-TV18 said that he is not surprised that Nifty is not outperforming the midcaps anymore and expects that to continue broadly.

“Fundamentally, our belief since last 2-3 months has been that the midcap underperformance to our mind from a fundamental sense is over. So from a 2-3 year perspective, we do not expect the midcap index to trail Nifty at these kinds of valuations,” said Gunwani.

He further added that looking at midcap stocks from a bottom-up basis, even the stocks that are not cyclical and have got steady earnings the price to book is quite attractive versus a lot of largecap companies.

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 Sep 20, 2019 10:03 am
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