Mumbai: One in every three stocks in the Bombay Stock Exchange’s (BSE) Sensex has plunged more than the benchmark index, which is down about 22% since touching its peak in the second week of January. In case of broad-based 50-stock Nifty of the National Stock Exchange, the fall is even sharper with two in every five stocks having lost more than the index itself since its peak. The Nifty index has lost about 24% since 8 January.
Except for one stock, that of DLF Ltd, all Sensex stocks are part of Nifty and hence the losers are common for both indices even though the quantum of loss may not be identical.
A Mint analysis of India’s two key equity indices indicates that among the 30 stocks in Sensex, only three have been able to buck the trend. In case of Nifty, four out of 50 stocks have remained insulated from the meltdown.
Reliance Energy Ltd (REL), an arm of Reliance Anil Dhirubhai Ambani Group (R-Adag), is the biggest loser in both the indices, and its slump is more than double what Sensex and Nifty have witnessed. REL has lost 48.48% on BSE since 10 January when Sensex hit its lifetime high. On NSE, the erosion of value for REL is 50.05% since 8 January, when Nifty reached its peak.
REL apart, other big losers in Sensex are realtor DLF and ICICI Bank Ltd, the largest Indian bank by market capitalization, losing 42.4% and 34.2%, respectively, since 10 January.
Among the Nifty stocks, Unitech Ltd and clean-energy player Suzlon Energy Ltd are the second and third largest losers, both dropping more than 45% in their share prices.
“Some of the high-beta stocks had led the Sensex rally and they are now falling the most,” said Nitin A. Khandkar, vice-president of research at Mumbai-based brokerage Keynote Capital Ltd. “The R-Adag stocks are dropping more than others.”
Realty stocks, too, had been valued very highly by the market during the bull run, said analysts, explaining the big drop in their market value.
ICICI Bank stock’s slide, however, was accentuated by its recent disclosure of credit derivative-related losses. Most of the bank stocks have been hit after the proposed Rs60,000 crore farm loan write-off in the Buget.
A handful of pharma, auto and IT stocks have bucked the trend in both the key indices.
Ranbaxy Laboratories Ltd, which gained 9.2%, Maruti Suzuki India Ltd (2.8%) and Satyam Computer Services Ltd (0.8%) were the three gainers in Sensex, during this period. Ranbaxy also is present in the pack of Nifty stocks that have gained.
The contrarian stocks in the Nifty index include three drug makers—Sun Pharmaceuticals Industries Ltd, Ranbaxy and GlaxoSmithKline Pharma Ltd—and the two-wheeler manufacturer Hero Honda Motors Ltd. Ranbaxy has recently announced plans to list its drug discovery arm, after a demerger later this year. Sun Pharma has raised its stake in Israeli drug maker Taro Pharma from 25% to 34.4%.
Analysts said investors are buying some pharma, auto and IT stocks, which were laggards in the past, as a defence play, as all other sectors are falling.
According to a pharma analyst at a US-based brokerage house, this rise against the trend is because of the change in sector weightage by large portfolio fund managers, who have started accumulating value-picks.
C.H. Unnikrishnan contributed to this story.