The brutal attack by bears on Dalal Street has wiped off Rs 21 lakh crore market capitalisation of BSE-listed firms during the first six months of 2022 till June 28. Market watchers believe that a couple of factors including the falling rupee, soaring inflation, rising interest rates, heavy selling by foreign institutional investors and geopolitical crisis have weighed on market sentiment. As a result, the benchmark index BSE Sensex cracked nearly 9 per cent on a year-to-date basis.
Following the heavy selling in the equity markets, the market value of BSE-listed firms retreated to Rs 245 lakh crore on June 28, 2022 from Rs 266 lakh crore on December 31 last year. However, as many as 16 stocks defied the fall to rally over 100 per cent during the same period.
With a gain of 524 per cent, Shanti Educational Initiatives emerged as the top gainer in the list. It was followed by Shankar Lal Rampal Dye-Chem (up 486 per cent), Cressanda Solutions (up 443 per cent), Gensol Engineering (up 434 per cent), Magellanic Cloud (up 312 per cent), Chennai Petroleum Corporation (up 218 per cent), Choice International (up 206 per cent) and Adani Power (up 171 per cent).
Commenting on the present market condition, Anand Radhakrishnan, CIO (Equity), Franklin Templeton said, “The Indian economy has been dealing with high levels of imported inflation on account of rising global commodity prices led by supply disruption, prompting the central bank to take speedier measures to anchor inflation expectations and lower the systemic liquidity levels.”
With an objective to tame inflation, the Reserve Bank of India upped the repo rate by a total of 90 basis points in May and early June and the cash reserve ratio (CRR) by 50 basis points.
Data further highlighted that Sadhana Nitro Chem, Vadilal Industries, White Organic Retail, Jyoti Resins & Adhesives, Mangalore Refinery And Petrochemicals, KPI Green Energy, Arihant Capital Markets and BLS International Services also surged over 100 per cent during January-June. Companies with over Rs 500 crore of market capitalisation are considered for the article.
On the other hand, stocks like Dhani Services, Indiabulls Real Estate, Asian Granito India, Himatsingka Seide, Solara Active Pharma Sciences, Brightcom Group, Raghuvir Synthetics and Dhani Services have cracked over 50 per cent so far in 2022.
Going ahead, Kotak Institutional Equities advised investors to focus on valuations. “Recent positive news on recovery in monsoons, collapse in metal prices raises hopes about domestic inflation peaking over the next few months and trending down in the second half of FY23. Inflation remains the key variable for global and domestic markets and any signs of easing in inflation will likely provide a cap to bond yields and a bottom to markets. It is much more useful to focus on valuations,” the brokerages said.
