With a decline of more than 3,500 points in the last three months, the Sensex has reached a level (17,463) which is a tad above its seven months levels (July 5th,2010). While most sectoral indices have taken a beating as well, there are few indices which have not only shown larger declines than that of Sensex but also have fallen way below the levels they were at seven months before. Various reasons like debt concerns to mounting losses to higher crude oil prices have negatively affected these sectors, namely, realty, capital goods, and oil & gas.

While Sensex closed below 17,500 mark on Thursday, declining by close to 17% from its peak in November last year, some of the other sectoral indices which demonstrated similar declines are that on healthcare, metals, FMCG and Oil and Gas sectors. BSE IT index on the other hand showed a comparative outperformance over all the broader indices by declining 10% from its 2010.

Index on sectors like banks, capital goods and realty declined by more than 20% with realty sector emerging as the worst performer losing half of its value since its peak in October last year.

Further realty index reappears as the worst performer given that it has fallen by more than one third to their level seven months back, when Sensex was closer to its current level. With this under performance the realty index has now moved lower than its value in early April 2009, the nascent phase of the latest bull run.

Rising debt burden, tightening liquidity and negative news flows like the arrest of DB Realty group?s managing director Shahid Balwa have kept the sector under pressure. Going ahead, the sector is still expected to dampen further with a possibility of a decline in the property prices. BSE capital goods is another evident laggard which has fallen below the levels it traded in third week of August 2009. It not only has lost 26% from its 2010 peak, it is now standing about 14% below its value in early July last year.

The prime reason for this decline has been project delays from the government, debt repayment concerns for certain companies and losses posted by several companies in the December 2010 quarter.

In the coming months the spending on capital goods is likely to be lower with infrastructure projects slowing down significantly as a result of higher interest rates.