Markets rout plunges over 120 companies to 52-week lows

Mumabi, Jan 7 (IANS) Diminishing interest of foreign investors, coupled with softening of commodity prices and lower earnings has weighed heavy on many well-known stocks of the Indian equity markets.

Data with the stock markets showed that scrip of 123 companies have receded to touch their 52-week lows since the start of 2016.

“Indian market looks at reduced chances of RBI (Reserve Bank of India) rate cut, increased chances of a US rate hike, and expectations from the government are more grounded now,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

“Additionally, slowdown in Chinese equities, and the sharp falls in its equities as well as yuan have had global ramifications, which are still unfolding.”

Among prominent names — State Bank of India (SBI) hit its 52-week low at Rs.209 during the intra-day trade on Thursday. It closed at Rs.209.55.

Other top names include Axis Bank, PNB, Larsen and Toubro (L&T), BHEL and ACC which have touched their 52-week low.

“We have a lot of BFSI (banking, financial services and insurance) stocks hitting new lows which include stocks such as SBI, PNB, etc. Apart from these banks, we have blue chips such as BHEL, L&T, P&G,” elaborated Vaibhav Agarwal, vice president and research head at Angel Broking.

“These companies are pretty much across sectors, categories, etc. with no specific link to any particular commodity or shareholding pattern,” Agarwal said.

With the ongoing slide in markets, due to global and domestic reasons, market observers predicted 200 more companies will touch their 52-week lows.

During the last four sessions, the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) has plunged by 1,309.51 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) dwindled by 395.35 points.

On Thursday, the sell-off by panicked investors dragged down the barometer S&P BSE Sensex to a new 52-week low during the intra-day trade.

The NSE Nifty also came close to its 52-week and closing lows.

In addition, majority of the companies which are trading near their 52-week lows belong to the large-cap segment (23.4), followed by mid-cap (18.4) and small-cap (5.9).

Sector-wise, companies under the industrials and basic materials have receded the most with (37.8), followed by financial (36.7), consumer goods and services (17.8), technology (3.3) and telecom (2.2).

“Thirtyseven percent of all the companies trading near their 52 week low share price are from financials sector, which is majorly due to the NPAs (non-performing assets) issue,” said Vikas Gupta, executive vice president and chief investment officer at ArthVeda Capital.

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