ITC, HDFC Bank, Paytm among 300 BSE 500 stocks that are over 10% below their 52-week highs. Time to cut equity exposure?

Equity benchmarks, the Sensex and the Nifty 50, are present down astir 2 per cent from their all-time precocious levels of 75,124.28 and 22,794.70, respectively. The midcap and smallcap segments person suffered more. The BSE Midcap and Smallcap indices are down astir 4 per cent each from their respective all-time precocious levels.

According to information from Capitalmarket, arsenic galore arsenic 323 stocks from the BSE 500 scale are down implicit 10 per cent from their 52-week precocious levels, portion the scale is down 3 per cent from its all-time high. Some 34 stocks are down implicit 30 per cent, portion 134 stocks are down implicit 20 per cent from their 52-week highs successful the BSE 500 index.

Shares of Paytm genitor One 97 Communications are the apical losers successful the scale arsenic they are down astir 67 per cent from their 52-week high. Stocks specified arsenic SPARC, Zee Entertainment, Rajesh Exports and Delta Corp are down 54-56 per cent from their 52-week highs.

Stocks specified arsenic Vodafone Idea (down 33 per cent), PVR Inox (down 30 per cent), YES Bank (down 30 per cent), Adani Total Gas (down 28 per cent), LTIMindtree (down 27 per cent), HCL Technologies (down 22 per cent), MRF (down 18 per cent), Bajaj Finance (down 16 per cent), Wipro (down 15 per cent), HDFC Bank (down 14 per cent) and ITC (down 12 per cent) person fallen much than 10 per cent from their 52-week highs.

Why is the Indian banal marketplace falling?

Multiple factors are weighing connected home marketplace sentiment. Rich valuation of the marketplace looks unsustainable amid unimpressive March 4th earnings. Besides, the marketplace has discounted respective positives to a just grade and lacks caller triggers to determination ahead. Feeble expectations of complaint cuts this twelvemonth are different origin keeping the sentiment sombre.

As the Lok Sabha predetermination result draws near, the marketplace is displaying signs of apprehension regarding the imaginable for the incumbent authorities to unafraid a two-thirds majority. Such an result would bolster assurance successful the continuation of argumentation reforms.

"The unit connected the marketplace present is owed to the uncertainty regarding the predetermination outcome. There is tons of speculation successful the media regarding this, which has added to the uncertainty successful the market," said V K Vijayakumar, Chief Investment Strategist astatine Geojit Financial Services.

Also Read: Investors instrumentality screen up of predetermination outcome

"The India VIX spiking 72 per cent from the April lows indicates that precocious volatility volition persist for immoderate much time. It is important to recognize that VIX is based connected Nifty scale options prices. The spike successful VIX is owed to the rising measurement of options trades. Many investors are buying enactment options to support their portfolios successful lawsuit of an unexpected predetermination outcome," said Vijayakumar.

Also Read: 5 reasons wherefore banal marketplace is falling up of Lok Sabha predetermination outcome

Time to trim vulnerability to equities?

Many experts expect the marketplace to stay volatile successful the run-up to the predetermination outcome, and they counsel investors to beryllium cautious successful the abbreviated term. However, they spot the marketplace clang arsenic a buying accidental arsenic the mean to semipermanent prospects of the Indian banal marketplace stay positive.

G. Chokkalingam, Founder and Head of Research astatine Equinomics Research Private Limited said 1 should beryllium cautious successful the short-term, generating anyplace from 10 per cent to 20 per cent currency (based connected hazard profile) and allocating the equilibrium equity assets betwixt ample caps and tiny and mid headdress segments arsenic connected the short-term.

Chokkalingam is bullish astir the marketplace successful the mean to agelong word perspective.

"We judge that erstwhile the unchangeable authorities is formed, investors tin deploy afloat currency and adjacent bring caller currency to enactment successful the forthcoming semipermanent large structural communicative of Indian equity markets," said Chokkalingam.

Also Read: Expert view: Indian banal marketplace inherently beardown to prolong gains; look beyond contiguous triggers

"For semipermanent investors, the ongoing volatility and uncertainty contiguous buying opportunities. Despite the uncertainty, the basal lawsuit script is the instrumentality of the NDA to power. Once clarity emerges connected this, the marketplace volition bounce backmost sharply, led by high-quality large-caps, which are anemic present owed to large selling by FIIs," said Vijayakumar.

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Disclaimer: The views and recommendations supra are those of idiosyncratic analysts, experts, and brokerage firms, not Mint. We counsel investors to consult certified experts earlier making immoderate concern decisions.

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Published: 08 May 2024, 01:28 PM IST