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BSE 500 index set to post worst show in 7 years

The index, which accounts 93 per cent of the total market capitalisation of BSE listed companies cover all major industries in the Indian economy, has lost 4 per cent thus far in 2018

Deepak Korgaonkar  |  Mumbai 

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The S&P 500 index is set to post its worst performance in seven years led by financial, automobile, infrastructure, and on the back of heavy selling by (FPIs).

The index, which accounts 93 per cent of the total of listed companies cover all major industries in the Indian economy, has lost 4 per cent thus far in the current calendar year (CY18), after rallying 36 per cent in calendar year (CY17). The performance in is worst since CY11 when the index had slipped 27 per cent during the year. On a year-to-date (YTD) basis, the (m-cap) of BSE-listed companies has plunged Rs 8.43 trillion to Rs 143.30 trillion.

FLOW

FPIs sold net Rs 329 billion ($4.37 billion) thus far in CY18, their largest net outflow in the past decade. Earlier, in CY08, they had made net outflow of Rs 538 billion ($12.19 billion), Sebi data shows. The domestic mutual funds, however, pumped in net of Rs 1.18 trillion in equities during CY18, after net investment of Rs 1.19 trillion in CY17.

"Notwithstanding these opinion polls, we expect political uncertainty to hit a feverish pitch in January-April, as the risk of non-BJP parties coalescing to compete against the BJP will keep the tail risk elevated," said analysts at Nomura in a recent report.

Adding: "We expect this to adversely affect capital inflows during this period. In our base case, we expect the BJP to form the next government in May 2019, albeit without an absolute majority, as suggested by current opinion polls. Nevertheless, this should pave the way for political stability, policy continuity and trigger net capital inflows into India."

MID, SMALL-CAPS UNDERPERFORM

The S&P Midcap (down 14 per cent) and the S&P BSE Smallcap index (down 24 per cent), too, recorded their sharpest yearly fall since CY11. These indices had rallied 48 per cent and 60 per cent, respectively in CY17.

Meanwhile, the benchmark indices, the S&P BSE Sensex (up 5 per cent) and Nifty 50 (up 2 per cent) are set to post positive returns in past three consecutive years. In CY17, Sensex and Nifty had rallied 28 per cent each.

Going ahead, analysts expect the mid, small-caps to outperform their larger peers in CY19. “Small-caps and mid-caps will outperform large caps in 2019, as the earnings cycle picks up and the Fed tightening cycle eases towards the middle of 2019,” said Jyotivardhan Jaipuria, founder and managing director, Valentis Advisors in an interview to Business Standard.

CLICK HERE TO READ THE FULL INTERVIEW

FINANCIALS TAKE A HIT

Nearly four out of five stocks that comprise the S&P index have recorded negative returns in Out of 500 companies, nearly 77 per cent, or 384 stocks, have seen their market price decline in Of these, 165 stocks slipped between 25 per cent and 50 per cent, while 57 stocks plunged over 50 per cent.

Among financials, SREI Finance, Reliance Capital, Dewan Housing Finance, Punjab National Bank, Syndicate Bank, Central Bank of India, Andhra Bank, GIC Housing Finance and Repco Home Finance were among the top losers. (See table below)

IPO WATCH

Bandhan Bank, the sole company out of four companies from the index that listed during the year, gained 41 per cent against its issue price. The remaining three companies – Hindustan Aeronautics, ICICI Securities and Aster DM Healthcare – were down in the range of 20 per cent to 50 per cent from their respective issue price.

Company Price on BSE (in Rs)
29-12-2017 21-12-2018 % chg
Kwality 113.00 8.45 -92.5
ITNL 83.55 13.30 -84.1
8K Miles Software 906.95 155.60 -82.8
PC Jeweller 456.60 82.40 -82.0
Manpasand Beverages 436.75 85.90 -80.3
Reliance Naval & Engg 49.25 14.20 -71.2
Jaiprakash Associates 26.00 7.75 -70.2
Jet Airways 831.30 252.45 -69.6
Shankara Building Prod 1778.05 548.80 -69.1
Jindal Stainless 104.35 32.55 -68.8
HCC 36.75 11.60 -68.4
Navkar Corporation 187.40 61.95 -66.9
SREI Fin 99.85 34.60 -65.3
Infibeam Avenues 141.35 49.15 -65.2
Vodafone Idea 108.20 38.20 -64.7
Deepak Fertilisers 425.90 150.45 -64.7
Suzlon Energy 15.55 5.50 -64.6
Somany Ceramics 904.65 327.70 -63.8
Rain Industries 371.00 137.15 -63.0
HDIL 65.50 24.50 -62.6

First Published: Mon, December 24 2018. 07:30 IST
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