Stocks that led the rally prove more resilient in the fall

| Updated on: May 23, 2013
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Stocks that were winners in the Nifty’s 600-point rally between April 15 and May 17 that helped the index breach the psychological 6,000-level have been able to hold out resiliently in the downturn too. Similarly, it emerges that firms which were among the poorest performers during the rally period were also the worst-affected as the market tanked.

HUL drops minimum

For instance, Hindustan Unilever was one of the big winners during the April 15-May 17 rally, rising 23.4 per cent after it declared plans for a share buy-back. Even after the market’s decline, it remains one of the Top-10 performing stocks, shedding just 0.2 per cent during the ongoing correction.

 DLF, on the other hand, which was one of the worst performers during the rally — rising just 3.1 per cent, has lost 14.9 per cent since the start of this week. This comes in the wake of the Delhi High Court directing market regulator SEBI to conduct a speedy probe into irregularities in the real estate company’s 2007 IPO.

 Cairn India, another underperformer in the rally, with gains of just 3.6 per cent, has fallen by 7.8 per cent since May 20. There are some exceptions to this trend such as Coal India, which was one of the big losers in the rally with gains of just 1.2 per cent, has been one of the best performers in the correction period, gaining 2.3 per cent after its board declared a record dividend for 2012-13 at the start of the week.

  Another departure from this trend is Reliance Infrastructure that gained 19.9 per cent during the tenure of the rally to emerge as one of the Top-10 stocks in the 50-share Nifty index. But since the downturn began on April 19, the stock has lost 13.7 per cent, erasing much of the gains. This was prompted by the firm’s announcement that it would be exiting projects worth Rs 20,000 crore due to delays in the grant of statutory clearances.

 The Indian market had rallied on the back of a rate cut by the RBI and news of falling inflation, besides hopes that industrial output was once again on the rise. Significant inflows of foreign capital into the equity market were the other factor responsible for the market’s rise.

Downgrade fears  

Rating agency Standard & Poor’s affirmation of a negative outlook for India’s sovereign debt has once again raised the prospects of a downgrade to junk status in the near future. Besides this, the US Federal Reserve’s indications that it might scale down stimulus measures if the economy improves further — even though the bar for such a reduction was high — seems to have spooked investors.

Published on March 12, 2018

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