
Sensex just clocked its worst Q2 returns in four years

Summary
- The index gained just 1.7% during the last three months, as compared to 13% and 8.3% during the same quarter in the past two years. The last time it dropped lower during Q2 was in 2019, when returns declined 1.9%.
With just a 1.7% gain during the last three months, the benchmark BSE Sensex has just returned its worst September-ended quarter in four years. This was also true for the BSE500, BSE AllCap and the BSE LargeCap indices, even as the mid-cap and small-cap indices remained unscathed.
The Sensex had surged 8.3% during the September quarter last year, and nearly 13% in 2021. The last time it dropped lower during Q2 was in 2019, when the returns dipped into negative territory, declining 1.9%.
The negative return for the September quarter is in sharp contrast with that of the June quarter, when investors enjoyed a substantial gain of 9.7%, a significant upturn from the 3% drop in the March quarter.
Over the past four years, the Sensex has experienced significant periods of contraction and stabilization. The worst quarterly decline, of 28.5%, was seen in the March quarter of 2020, as the onset of the covid-19 pandemic wrecked global stock markets. In the past four years the index has gained in 12 quarters and declined in four.
Large-cap stocks also exhibited a similar pattern for the September quarter, achieving their lowest returns (2.5%) in four years for the corresponding period. In contrast, mid- and small-cap indices showed comparatively stronger performance, with 12.4% and 15.2% gains, respectively.
So far this year the BSE SmallCap index has outperformed both the BSE LargeCap and BSE MidCap indices, gaining 29.9% till Friday. In comparison, mid-cap stocks gained 27.8%, while large-caps have risen 6.5%. The mid-cap index has seen a steady rise but has faced many fluctuations along the way.
The auto, bank, consumer discretionary and basic-materials indices also had their worst Q2 showing in four years. In all, 11 of the 18 sectoral indices reported worse returns in Q2 as compared to the same quarter in the previous year, while seven gave improved returns.
However, all but two sectoral indices gained during the quarter, with utilities, industrial, and telecom reporting the biggest returns.