Mumbai: Bombay Stock Exchange’s benchmark index Sensex, the biggest loser among leading Asian indices since the beginning of 2008, recovered some 560 points from its intra-day low on Monday to close at 15,923.72, down 0.3%, but analysts are not convinced that the worst is over.
All other Asian market indices, except for Hong Kong’s Hang Seng, ended deep in the red on Monday, taking their cue from Friday’s performance of US markets, where benchmark indices slipped on poor February job data.
The Chinese index was the worst performer among key Asian markets, losing 3.5%. In Malaysia, trading halted as the benchmark index crashed 10% over political uncertainty after the opposition made significant gains although the ruling Barisan National coalition still won 63% of the seats.
Sensex, too, plunged more than 613 points in morning trade before recouping its losses. At the National Stock Exchange (NSE), the broader 50-stock Nifty index gained 0.6% to close at 4,800.40.
However, some of the sectors that have lost the most this year on BSE—realty, consumer durables, power, capital goods and banks—continued their slump on Monday.
Among the 13 sectoral indices on BSE, seven have lost more than the Sensex since 10 January, when the benchmark reached its all-time high of 21,206.77. Sensex so far has lost 24.91% from its peak.
The worst hit is the BSE Realty index, a basket of 14 realty stocks, down more than 41.9%. This is followed by BSE Consumer Durables index, BSE Power index and BSE Capital Goods index, which have lost 34.7%, 33.79% and 32.16%, respectively. The bank stock basket, BSE Bankex, has also lost about 30%.
Among real estate developers, Omaxe Ltd is the worst hit. It lost about 60%. DLF Ltd and Unitech Ltd lost 40.4% and 47.2%, respectively. In the power pack, GVK Power and Infrastructure Ltd and Reliance Energy Ltd have lost about half of the market value they commanded in mid-January. Videocon Industries Ltd is the biggest loser among consumer durables, down 51.4%.
Two other sectoral indices that lost more than the Sensex since 10 January are BSE PSU (public sector undertaking) index and BSE Oil & Gas index. Not a single index has been able to buck the trend but BSE’s Health Care and FMCG indices have been relatively insulated from the downtrend, having contained their losses below 9%. The BSE IT, BSE Auto and BSE Metal indices are among other indices that have not witnessed value erosion as much as the Sensex.
A director at a large multinational brokerage in India, who did not wish to be named, said retail investors are now following the footsteps of institutional investors who had reversed sector allocation in their portfolios during the market slide. “A few sectors such as realty, consumer durables, power and banks were the favourites of funds earlier. During the fall, the funds picked pharma, IT and auto stocks, considering their low valuations. Retail investors, too, are now following these stocks,” he said.
Ashwin Ramarathinam contributed to this story.