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Business News/ Markets / Stock Markets/  ITC, HDFC Bank, Paytm among 300 BSE 500 stocks that are over 10% below their 52-week highs. Time to cut equity exposure?
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ITC, HDFC Bank, Paytm among 300 BSE 500 stocks that are over 10% below their 52-week highs. Time to cut equity exposure?

Several Indian stocks, including HDFC Bank, ITC, Paytm, Vodafone Idea and PVR Inox, have fallen over 10 per cent from their 52-week highs due to multiple factors affecting the market sentiment.

According to data from Capitalmarket, as many as 323 stocks from the BSE 500 index are down over 10 per cent from their 52-week high levels. (Agencies)Premium
According to data from Capitalmarket, as many as 323 stocks from the BSE 500 index are down over 10 per cent from their 52-week high levels. (Agencies)

The recent broad-based selloff in the Indian stock market has led to a downturn across sectors, causing many stocks to plummet by more than 50 per cent from their 52-week highs.

Equity benchmarks, the Sensex and the Nifty 50, are now down nearly 2 per cent from their all-time high levels of 75,124.28 and 22,794.70, respectively. The midcap and smallcap segments have suffered more. The BSE Midcap and Smallcap indices are down about 4 per cent each from their respective all-time high levels.

According to data from Capitalmarket, as many as 323 stocks from the BSE 500 index are down over 10 per cent from their 52-week high levels, while the index is down 3 per cent from its all-time high. Some 34 stocks are down over 30 per cent, while 134 stocks are down over 20 per cent from their 52-week highs in the BSE 500 index.

Shares of Paytm parent One 97 Communications are the top losers in the index as they are down nearly 67 per cent from their 52-week high. Stocks such as SPARC, Zee Entertainment, Rajesh Exports and Delta Corp are down 54-56 per cent from their 52-week highs.

BSE 500 stocks
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BSE 500 stocks

Stocks such as Vodafone Idea (down 33 per cent), PVR Inox (down 30 per cent), YES Bank (down 30 per cent), Adani Total Gas (down 28 per cent), LTIMindtree (down 27 per cent), HCL Technologies (down 22 per cent), MRF (down 18 per cent), Bajaj Finance (down 16 per cent), Wipro (down 15 per cent), HDFC Bank (down 14 per cent) and ITC (down 12 per cent) have fallen more than 10 per cent from their 52-week highs.

Why is the Indian stock market falling?

Multiple factors are weighing on domestic market sentiment. Rich valuation of the market looks unsustainable amid unimpressive March quarter earnings. Besides, the market has discounted several positives to a fair extent and lacks fresh triggers to move ahead. Feeble expectations of rate cuts this year are another factor keeping the sentiment sombre.

As the Lok Sabha election outcome draws near, the market is displaying signs of apprehension regarding the potential for the incumbent government to secure a two-thirds majority. Such an outcome would bolster confidence in the continuation of policy reforms.

"The pressure on the market now is due to the uncertainty regarding the election outcome. There is lots of speculation in the media regarding this, which has added to the uncertainty in the market," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Also Read: Investors take cover ahead of election outcome

"The India VIX spiking 72 per cent from the April lows indicates that high volatility will persist for some more time. It is important to understand that VIX is based on Nifty index options prices. The spike in VIX is due to the rising volume of options trades. Many investors are buying put options to protect their portfolios in case of an unexpected election outcome," said Vijayakumar.

Also Read: 5 reasons why stock market is falling ahead of Lok Sabha election outcome

Time to trim exposure to equities?

Many experts expect the market to remain volatile in the run-up to the election outcome, and they advise investors to be cautious in the short term. However, they see the market crash as a buying opportunity as the medium to long-term prospects of the Indian stock market remain positive.

G. Chokkalingam, Founder and Head of Research at Equinomics Research Private Limited said one should be cautious in the short-term, generating anywhere from 10 per cent to 20 per cent cash (based on risk profile) and allocating the balance equity assets between large caps and small and mid cap segments equally on the short-term.

Chokkalingam is bullish about the market in the medium to long term perspective.

"We believe that once the stable government is formed, investors can deploy full cash and even bring new cash to participate in the forthcoming long-term great structural story of Indian equity markets," said Chokkalingam.

Also Read: Expert view: Indian stock market inherently strong to sustain gains; look beyond immediate triggers

"For long-term investors, the ongoing volatility and uncertainty present buying opportunities. Despite the uncertainty, the base case scenario is the return of the NDA to power. Once clarity emerges on this, the market will bounce back sharply, led by high-quality large-caps, which are weak now due to big selling by FIIs," said Vijayakumar.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.

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Published: 08 May 2024, 01:28 PM IST
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