500 Stocks Hit 52-Week Lows After War In Iraq

Market cap of these stocks drop by Rs 10,000 crore

The prices of 500 stocks, accounting for 33 per cent of the total number of actively traded stocks, have sunk to 52-week lows after the beginning of the US war with Iraq on March 20. The aggregate market capitalisation of these stocks dropped by almost Rs 10,000 crore during the six trading days after the war started.

The 500 stocks that declined to new 52-week lows are traded under the A, B1 and B2 groups of the Bombay Stock Exchange. Of these, 37 are from the A group, 183 are from the B1 group and 280 from the B2 group.

The major stocks that have been affected by the war are those of software and pharmaceutical companies. Nearly a fifth of the 500 stocks that have declined to 52-week lows are software company shares. As many as 62 are pharmaceutical company shares.

The remaining shares are those of banks, 2/3- wheeler, paints, tyres, hotel, cement, telecommunications, entertainment and fertilisers companies.

Of the 500 stocks that sunk to their new 52-week lows during the six days after the onset of war, the market price of 230 stocks declined to a new all-time low. This list includes fast moving consumer goods major Colgate which dropped to a nine-year low of Rs 120 yesterday.

Telecom major VSNL (Rs 75.50), two-wheeler major Escorts (Rs 35.40) and cement company India Cement (Rs 13.20) have sunk to new nine-year lows in the last three trading days.

The fear-striken markets now figure out that war may not be as short as expected earlier. Investors, including foreign institutional investors, have preferred a wait and watch policy instead of buying stocks during days of uncertainty.

The combined daily volumes on the BSE and the National Stock Exchange (NSE) have declined from an average of around Rs 3,500-4,000 crore in February to around Rs 3,000 crore in the third week of the current month.

The major companies in the 52-week low list are NIIT, GTL, Bata India, EIH, Ballarpur Industries, Zee Telefilms, Pfizer, Hiduja TMT and Mukta Arts.