Sensex logs longest losing spree in over 5 years, but these stocks rally up to 50%

Looming concerns over geopolitical tensions between India and Pakistan and rising crude oil prices dragged benchmark BSE Sensex lower for the eighth straight session on Monday, its longest losing streak since August 2013.

As a result, the market capitalisation of the BSE-listed firms declined by Rs 5.69 lakh crore to Rs 136.31 lakh c rore on February 18 from Rs 142 lakh crore on February 6.

The NSE Nifty also declined for the seventh straight session with the index falling below the 10,650 mark.

The BSE Sensex has plunged 4 per cent to 35,498.44 during the eight days of fall. With this, the 30-share index is now down 2 per cent on a year-to-date basis. Following the fall, India is now among the worst performing equity markets for 2019, whereas American indices Dow, Nasdaq and S&P 500 are up over 10 per cent till date. Asian peers Hang Seng and Shanghai have advanced 10 per cent on a year-to-date basis.

The overall view suggests deep pain for stock market. However, companies such as Capital India Finance, Dilip Buildcon, Shankara Building Products, Dish TV, Redington India rallied 20-50 per cent in this selloff. Overall, as many as 563 companies managed to deliver positive return to investors in the last eight sessions.

On the other hand, companies such as Punj Lloyd, Sadhana Nitro Chem, Indsil Hydro Power, Uflex and Indo Count stood among the companies that witnessed up to 39 per cent fall during the same period.

After the correction, Sensex is now hovering at a price-to-earnings ratio of 22.68 times against five year average of 21.21, still indicating little overvaluation at index levels.

Hemang Jani, Head-Advisory, Sharekhan by BNP Paribas said, “Market participants have turned cautious ahead of the general elections. Q3FY19 earnings too have been lacklustre so far. On the positive side, FII and DII inflows have improved in January. We continue to remain stock specific and prefer private banking and consumption stocks. Volatility in the markets is likely to continue and investors should stay away from companies with expensive valuations and corporate governance issues.”

After an outflow of Rs 4,262 crore in January, foreign portfolio investors have poured over Rs 5,000 crore in Indian equity market. On the other hand, domestic institutional investors bought share worth over Rs 4,500 crore (net) in 2019 so far.

Vinod Nair, Head of Research, Geojit Financial Services said, “Market remained on a selling spree as reducing foreign inflows due to fear of escalation of tensions at the border impacted the sentiment. Rupee weaning, rising 10-year bond yield and increased oil prices are expected to weaken domestic macros. Volatility in the market to continue due to lack of domestic triggers and investors are likely to remain cautious. However, global market stands positive supported by hope in US-China trade deals.”