The Hindu Business Line : Most indices in red despite Sensex shining

Few gainers
The market is riding high on few front-running stocks such as Reliance, Infosys, ICICI and TCS
Mid-cap and small-cap stocks have not participated in the Sensex rally

Mumbai , Oct. 17

The thumb rule that a surge in BSE Sensex will influence sectoral indices has proved wrong yet again. With the exception of BSE Bankex and BSE IT indices, the "dream trot" of the bellwether index failed to spur other sectoral stocks.

The BSE Bankex and BSE IT indices outperformed the Sensex, logging 7.4 per cent and 17.11 per cent returns (May 10 to October 17) respectively. The Sensex, during the same period, offered a 2.15 per cent return.

Metal - the worst

Almost all major indices posted negative returns during the period. The metal index was the worst hit dropping by 20.74 per cent. BSE Smallcap (down 18.66 per cent), Midcap (down 12.55 per cent) were the other biggest losers.

"The current surge in markets has a very narrow base. It is riding high on a very few front-running stocks such as Reliance, Infosys, ICICI and TCS. Overseas investments in large cap stocks have also helped the Sensex to log an all-time high," said Mr Ketan Jhaveri of DH Securities.

"Banks were not great performers until sometime back. However, over the past few months the sector has done well on good credit growth, steady interest rates, reduced concerns over asset quality and stable margins. ICICI, HDFC and SBI led the index rally all the way to the top. IT was fairly valued for most part of the considered period. Infosys and TCS led the charge for the IT index," said Mr Manoj Shroff, Equity Analyst, Parag Parekh Financial Services.

Other indices

According to market analysts, metals stocks had peaked and settled well before the "May surge and crash".

"The Metal index even led the charge for some time before turning in for consolidation. Hindalco and Nalco failed to keep up to our expectations in the bourses," said Mr Hitesh Agrawal, Analyst - Cement and Metal, Angel Stock Broking.

Mid-cap and small-cap stocks did not participate in the Sensex rally. "Leaving out some specific stocks, the indices almost remained passive to the bull run. We should see some movement in the mid-cap index towards the end of quarterly results. Long-term funds are needed to provide more liquidity in the index.

As for small-cap stocks, investors have become apprehensive of them post the market crash in May," said Mr Gaurang Shah of Geojit Financial Services.

More Stories on : Stock Markets | Stocks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Easterly wave comes calling as Bay warms

Tatas make $10-b bid for Corus

Jet Airways posts Rs 55.1-cr loss in Q2

HDFC Bank net rises 31 pc in Q2

Most indices in red despite Sensex shining

Rain group stocks active on merger plans

Attrition rate at TCS at 10.6 pc

Concor to hike rates by 3-6 pc from Nov

MTNL launches Net TV in Capital

Commodities may recover on tight fundamentals