Brisk selling in the domestic equity market since the beginning of September has not spared even a single sector, as all BSE sectoral indices have plunged up to 24 per cent between August 31 and October 4.
Starting with the underperformers, the BSE Realty index has tanked the most at 23.85 per cent. It was followed by Auto (down 17 per cent), Bankex (down 13 per cent), FMCG (down 12 per cent), Capital Goods (down 10 per cent) and Power (down 10 per cent).
BSE benchmark Sensex has slipped 9 per cent so far.
The automobile industry witnessed divergent trends in September; while the commercial vehicles and two-wheelers segments registered robust volume growth, four-wheeler volume was flat.
“For the four-wheeler segment, demand was impacted by slightly negative consumer sentiment and postponement of demand to the festive season,” Prabhudas Lilladher said in a report. Shares of Maruti Suzuki, Mahindra & Mahindra and Tata Motors have slipped up to 20 per cent in the recent market correction.
Financial stocks came under pressure after IL&FS group surprised the Street with a series of defaults. Selling of NBFC debt by mutual funds exaggerated the selloff.
“The market has been seeing a sharp selloff on account of depreciation in rupee and higher crude prices. This negative sentiment was further reinforced by the fear of liquidity crisis to support credit growth following the IL&FS scare. We believe that the long-term story of markets remains intact,” said Nitasha Shankar, Senior Vice President and Head of Research at YES Securities.
A falling rupee aided information technology stocks during the same period. The BSE IT index lost 2.63 per cent during August 31 and October 4. The Metal index has dipped 2 per cent, while Healthcare, TECk and Oil & Gas indices have declined 8 per cent, 4 per cent, and 3.80 per cent, respectively, since August 31.
Losses of metal stocks capped downside followed strong base metal prices on London Metal Exchange.
“The fall in the market should be treated as an opportunity to accumulate fundamentally strong companies where valuations have corrected to attractive levels,” said Shankar.
Bank of America-Merrill Lynch sees some more pain the market. The global financial sevices firm’s year-end target for BSE Sensex at 32,000 implies another 11 per cent plunge from Wednesday’s close. That would put the gauge 2.5 per cent away from a bear market – a 20 per cent slide from its August 28 record.
With a fall of over 60 per cent, Infibeam Avenues and Rolta India emerged as top losers in the BSE sectoral indices. 8K Miles Software (down 47 per cent), Indiabull Real Estate (down 41 per cent, Kwality (down 40 per cent) and YES Bank (down 38 per cent) have been other top wealth destroyers.
On the other hand, FMCG stocks including Dhampur Sugar Mills, Bajaj Hindusthan, Dwarikesh Sugar Industries, Avadh Sugar and Uttam Sugar delivered double-digit return to investors during the same period.
Wipro, ABB India, Aurobindo Pharma, Hindalco and Triveni Engineering stood among other top gainers among BSE sectoral indices.