After dropping 15% from the peak, markets are staging a recovery. Stocks that have gained the most in the BSE500 universe over the past two weeks are beaten-down names like Infibeam Avenues, PC Jeweller and Reliance Communications.
Non-banking financial companies (NBFCs), too, have rallied by over 25% in the past two weeks amid easing of liquidity conditions. In comparison, the Nifty is up around 5 per cent since October 6, when it had closed at an eight-month low. The broad-based BSE500 index has also risen 5% during this period, with nearly 90% of its components up. Market players saw the rebound in the beaten-down names as a case of “bottom fishing” —a term used for acquiring shares the prices of which are depressed. Most of the top BSE500 gainers had lost over two-thirds of their value before the recovery. Even now, they are sharply below their 52-week highs. Experts caution investors against getting carried away by the latest rise. “High-beta stocks have gained sharply. They could, once again, correct if the market mood changes,” said an analyst. Companies with high debt and poor governance track record are better avoided, experts say.
 "Illustration by Ajay Mohanty")