NEW DELHI: One of every three BSE500 stocks plunged more than 10 per cent in May which saw the benchmark indices falling nearly 4.48 per cent for the month amid concerns over inflation, tightening monetary policy by central banks globally, rupee weakness and resultant foreign outflows.
Data showed 166 stocks from the index fell over 10 per cent; among them, 31 stocks tanked over 20 per cent. The list comprised stocks from a host of sectors, including steel, paints, diagnostics, cement, textiles, midcap IT and financials.
The worst fall was seen in the steel sector. Two stocks
and Jindal Stainless (Hisar) were the top index losers, falling 39 per cent and 38 per cent, respectively, for the month.
Jindal Steel & Power, JSW Steel, SAIL and Tata Steel fell 30 per cent, 24 per cent, 21 per cent and 16 per cent, respectively, for the month.
Steel stocks fell as the government took measures to bring down raw material costs. The month saw hiking of export duty on iron ore to 50 per cent across all grades from 30 per cent for lumps. The government imposed excise duty on pellets at 45 per cent from nil earlier, making exports unviable.
Further, an export duty of 15 per cent on hot-rolled, and cold-rolled steel products was introduced from nil earlier. The development, seen as extremely negative, resulted in multiple de-rating for the sector stocks.
Diagnostic stocks Dr Lal Pathlabs, and took a 19-32 per cent hit after unlisted firm Tata 1mg launched deep discounts on diagnostics tests to draw customers to its platform.
Concerns over heightened competition and a surge in oil prices, and thus oil derivatives, hit paints stocks with
(down 14.6 per cent), , (down 14.49 per cent) and Asian Paints (down 11.7 per cent) falling up to 15 per cent.
Aditya Birla Group firm
has doubled the capital expenditure for its foray into the paints business to Rs 10,000 crore and expects to start production from the fourth quarter of FY24. In August last year, it had approved a Rs 5,000 crore capital expenditure plan to set up paints business.
Similar concerns weighed on cement stocks. The India Cements, Shree Cement,
and Dalmia Bharat dropped 10-17 per cent on worries over rising input costs and Adani-Holcim deal.
Select real estate developers such as
, Oberoi Realty and Sobha also saw their stocks falling 15-16 per cent. Among these stocks, Elara has upgraded Oberoi Realty to ‘buy’ from ‘accumulate’ following the recent slide. CLSA, on the other hand, has upgraded Sobha to ‘Outperform’ on favourable risk-reward post sharp fall in stock.
Chambal Fertilisers and Chemicals, GNFC,
and were some of the chemical stocks that plunged 17-20 per cent for the month. Textile firms such as , . and Welspun India were down 21-34 per cent.
Midcap and smallcap IT stocks such as
, Vakrangee and dropped 15-23 per cent.
“The performance of the Indian market over the next few months will depend on the trajectory of domestic and global inflation. Valuations of the Indian market and most sectors look more reasonable after the recent correction,” Kotak Institutional Equities said in a note.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
