Tuesday’s slide in the rupee, coupled with the prevailing slowdown in the Indian economy, has dented investor confidence to such an extent that nearly 35% of the stocks listed on the National Stock Exchange (NSE) are currently below their 2009 lows.
According to Bloomberg data, as many as 438 stocks breached their lows that were seen in March of 2009 — in the aftermath of the Lehman Brother’s crisis. While the Nifty touched its low in October 2008, the broader CNX Midcap touched its low in March 2009.
While the NSE’s CNX Nifty — the gauge of top 50 stocks — had touched its low of 2,524.20 in October 2008, other indices such as the NSE mid-cap and small-cap indices touched their multi-year lows in March 2009 and, hence, provided a better perspective of the stocks traded on the NSE.
Meanwhile, a total of 122 stocks touched their new lows on Tuesday as further weakening in the currency sparked ‘risk-off’ fear among investors. Data also show that 181 stocks have hit their new lows since the beginning of August, thus representing 11.4% of the 1,590 stocks that are actively traded on the bourse.
Stocks belonging to banking and financial services space, as well as those sensitive to interest rates, largely feature in the list as the change in RBI’s stance towards the monetary policy has impacted their margins in a direct or an indirect way.
Some of the notable names include Reliance Infrastructure, BHEL, Financial Technologies, United Breweries, NTPC, Reliance Power, Bank of India, Bharat Petroleum and DLF. “Input costs are rising due to currency weakness. With weak demand constraining pricing power, margins are likely to remain under pressure,” said Sonal Varma, ED & India Economist, Nomura.