Nearly 50% of Sensex stocks close to 8-month lows

Reliance Ind, Larsen & Toubro, HDFC Bank and Bajaj Auto among the 14 Sensex stocks trading near 8-month lows

The recent carnage in the domestic stock markets in the last few sessions amid continued political uncertainty and basket-selling by foreign institutional investors has dragged nearly 50% of the Sensex stocks to their eight-month lows.

Reliance Industries, Larsen and Toubro (L&T), HDFC Bank, Bajaj Auto and Jindal Steel and Power are among the fourteen out of the 30-Sensex stocks trading near their eight month lows, while Hero MotoCorp and Sterlite Industries are quoting at one-year lows on the Bombay Stock Exchange (BSE).

Almost one out of two stocks from the Sensex basket are less than 6% away from their eight month lows even though the benchmark index has neared its five month low after overseas investors turned net sellers for a third consecutive day in Indian equities.

Meanwhile, among the Nifty-50, including Reliance Infrastructure, Jaiprakash Associates, Power Grid Corporation, Sesa Goa an ACC, about 21 stocks are less than 6% away from their eight month lows. The benchmark indices are 7% away from its eight month low of 17,198.

Foreign institutional investors (FIIs) sold shares worth a net Rs 740 crore in the past three trading sessions, as per provisional data from the stock exchanges on speculation of early general elections and weak global cues.

The Sensex hit a low of 18,389, its lowest level since November last year, during intra-day trade today and has fallen 652 points in the past three trading sessions. The index has declined 1,715 points from its recent high of 20,104 touched on January 25 this year.

Investors saw erosion of market capitalisation of over Rs 165,197 crore in past three trading sessions. The total market capitalisation of actively traded stocks on the exchanges declined to Rs 63,42,459 crore as on April 4.

Automobile stocks mainly two-wheelers – Bajaj Auto and Hero MotoCorp are under pressure as most of the analysts believe industry growth rates is likely to remain weak, given rising fuel prices and muted consumer sentiment.

Hero MotoCorp is trading at Rs 1,438, its lowest level since March 2011 on BSE. The stock has plunged 37% from its 52-week high of Rs 2,279 touched in May 2012.

	Price on BSE in Rs
Name	Intra-day low*	8-mth low	52-wk high
Hindalco Inds	87.65	86.90	137.00
Tata Steel	303.20	300.85	479.40
BHEL	176.50	174.50	272.45
Tata Power	94.50	92.90	113.20
Jindal Steel	328.25	321.10	523.00
NTPC	139.35	136.10	175.35
L&T	1347.10	1310.00	1719.50
Reliance Ind	766.20	745.55	954.80
HDFC Bank	613.70	583.55	705.00
GAIL (India)	312.20	300.40	396.00
*Intra-day low as on April 5,2013

“Auto sales number has been dropping of-late and Hero MotoCorp is facing huge competition from Honda which is eating market share,” said A K Prabhakar, Senior Vice President - Equity Research at Anand Rathi Financial Services.

Reliance Industries has hit a low of Rs 766 during intra-day trade, just 3% away from its eight-month low of Rs 745 touched on August 2012. The stock touched its 52-week low of Rs 671 on May 8 last year.

“The market sentiment was affected adversely by data showing that foreign funds remained net sellers of Indian stocks,” says analyst at Religare Retail Research.

“Slowdown in China and fall in commodity prices are among the major concerns for the Indian markets. The political uncertainty will continue to impact market moves and with talks of an early election on the cards, market may turn cautious in the near term,” says Amar Ambani, Head of Research, IIFL.

Upcoming, Q4 results season may manage to bring in some cheer with individual companies delivering good quarterly figures, however we would advice traders and investors to remain cautious, added Ambani.