It has been a volatile ride for the equity market investors over the past 10 days given the uncertainty ahead of the outcome of the general elections back home and fears of an escalation in trade war between the United States (US) and China.
Earlier this week, however, the markets recorded their best single-day gain in a decade with the S&P BSE Sensex surging a massive 1,422 points as exit polls showed the incumbent Narendra Modi – led National Democratic Alliance (NDA) return to power for the second consecutive five-year term.
Despite the euphoria, there are still a number of stocks that have seen a price erosion at the bourses. A quick analysis of the stocks listed on the BSE showed 46 stocks that have slipped as much as 31 per cent since May 14, 2019, data from ACE Equity shows. The S&P BSE Sensex, on the other hand, has gained nearly 4.5 per cent during this period.
MT Educare, Vikas WSP, Mangalam Organics, Jinaams Dress, Bartronics India, Lumax Industries, Jaypee Infratech, Newgen Software, Ajanta Pharma, Rajesh Exports and Tech Mahindra are some of the stocks that lost ground in an overall volatile, but rising market.
While most analysts agree that the markets are pricing in a victory for the NDA, they caution against volatility over the next few sessions. The road ahead for the markets post the election outcome, they say, will be guided more by fundamental factors such as a recovery in corporate earnings, health of the economy and other global factors.
“Notwithstanding the near-term rally, we expect the markets to consolidate post the election outcome (even if favourable), as focus would shift back to fundamentals (corporate earnings) and global cues (trade tensions between US – China). Further, movement in crude oil prices, which has been gaining momentum post US ended Iran sanction waiver and currency, will also provide direction,” says Jayant Manglik, president – retail distribution at Religare Broking.
As regards corporate earnings, of the 19 Nifty companies that announced their March 2019 quarter (Q4FY19) earnings till May 08, 15 have either met or exceeded estimates of analysts at Motilal Oswal on both the profit after tax (PAT) and earnings before, interest, taxes, depreciation and amortisation (EBITDA) front.
"The earnings upgrade/downgrade ratio is < 1, with 14 MOFSL Universe companies witnessing upgrades of 3%+ and 26 witnessing downgrades of more than 3%, indicating the continued weak underlying earnings momentum. Among the Nifty constituents, ICICI Bank, Yes Bank, Indiabulls Housing Finance and Bharti Airtel missed our PAT estimates, while Maruti Suzuki, UltraTech Cement, Vedanta and Reliance Industries exceeded our estimates," said Gautam Duggad, head of institutional research at Motilal Oswal Financial Services in a recent report.
|ON A SLIPPERY SLOPE|
|Company Name||Date||Close Price (Rs)||Change (%)|
|BGIL Films & Technologies||21-May-19||1.88||-21.67|
|Five Core Exim||21-May-19||1.14||-21.38|
|Sadhana Nitro Chem||21-May-19||229.10||-9.57|
|Pro Fin Capital Services||21-May-19||45.10||-9.35|
|Atlas Jewellery India||21-May-19||42.75||-9.33|
|Vikas Proppant & Granite||21-May-19||14.50||-9.09|
|Primuss Pipes & Tubes||21-May-19||13.30||-8.59|
|Newgen Software Technologies||21-May-19||307.85||-8.16|
|Artech Power & Trading||21-May-19||1.72||-8.02|
|Brijlaxmi Leasing & Finance||21-May-19||1.75||-7.89|
|Ishan Dyes & Chemicals||21-May-19||28.05||-6.50|
|Alps Motor Finance||21-May-19||0.94||-5.05|
|Geetanjali Credit and Capital||21-May-19||1.72||-4.97|
|* Change since May 14, 2019|
|Data source: ACE Equity|