71% stocks trade below May 2008 levels

11 stocks, including Tata Steel, R-Comm and DLF, are down by over 30 per cent.

The 16-month highs for the two benchmark indices, the Sensex and the Nifty, look unconvincing as 71 per cent of the stocks are currently trading 30 per cent below the levels where they were 16 months ago. The current rally has been restricted to sectoral indices such as bank, auto, IT, capital goods and FMCG. Only 29 per cent stocks listed on the Bombay Stock Exchange (BSE) are currently trading around their 16-month highs.

Among the Sensex stocks, as many as 11, including Tata Steel, Reliance Communications and DLF, are still down by over 30 per cent each, while Hindalco, Reliance Industries and Sterlite Industries are trading nearly 15-23 per cent below their 16-month ago price levels. Interestingly, the 19 gainers contributed 603 points to the rise of the Sensex, while the rest 11 have declined by 542 points in the same period.
   

MOVERS AND LOSERS
Gainers A group	Sep 18,09	%chg*	Losers A group	Sep 18,09	% chg*
MphasiS	622.75	168	Rei Agro	48.90	-68
LIC Hsg Fin	764.60	129	Suzlon Energy	99.25	-66
Torrent Power	279.05	123	Jai Corp	230.65	-66
Hero Honda	1678.50	110	Glenmark Ph	221.90	-65
Maruti Suzuki	1640.85	108	Aban Offshore	1592.70	-61
Godrej Cons	245.90	82	Unitech	112.35	-58
P & G	1404.75	82	Indiabulls Fin	187.05	-55
Rural Elect	201.80	76	Koutons Retail	341.00	-54
Union Bank	247.70	69	Moser Baer	91.40	-50
Castrol	483.70	66	Praj Ind	103.25	-50
Share price on BSE in Rs, *Change over May 23, 2008

It seems that the rally has been more or less restricted to fundamentally strong companies with few exceptions. The 830 companies, whose market value rose above the 16-month level, have gained 24 per cent on the back of a 43 per cent rise in their net profits in the quarter ended June 2009. The 2,042 underperformers are currently trading 30 per cent below their 16-month ago levels. They have reported a 23 per cent decline in net profits in the same quarter.

The BSE mid- and small-cap indices, which outperformed the Sensex by gaining 135 per cent from their lows on March 9, 2009, are still down 11 per cent and 14 per cent, respectively, from their 16 month-ago levels achieved on May 23, 2008. Realty, consumer durables and metal sectors are currently trading over 13 per cent below their May 23, 2008 levels.

Power, healthcare and oil & and gas indices have declined around 5-6 per cent in the period. The auto sector, the largest gainer, has outperformed all other sectors by gaining 40 per cent from the May 23 levels on the back of strong first quarter earnings. The sector has posted a 64 per cent growth in net profit in the first quarter. Hero Honda Motors and Maruti Suzuki have seen their market value jump over 90 per cent from the 16-month ago level.

The underperforming 2,042 companies have seen a value erosion of 29 per cent or by Rs 913,461 crore in investors’ wealth since May 23, 2008. On the other hand, the 830 gainers have increased their investors’ wealth by 24 per cent or by Rs 6,44,718 crore.