The reshuffle of the S&P BSE Sensex composition effective from June 18 will hit sectors like healthcare, private banks, technology, consumer and auto, a report said.Healthcare’s weight will now be at an eight-year low, with the exclusion of Dr Reddy’s Labs and also due to the significant underperformance of the sector over the last two years. Sun Pharma has a weightage of 1.7 per cent and will be the only healthcare stock in the benchmark index, broking firm Motilal Oswal said in its ‘India Strategy’ report here.
With the exit of Dr Reddy’s Labs having weightage of 0.8 per cent, healthcare stands to lose the most in terms of weight minus 70 basis points (bp) to 1.7 per cent). Earlier, in December 2017, Cipla and Lupin were excluded from the benchmark, it said.
Other losers include private banks (-20bp), technology (-10bp), consumer (10bp), and autos (-10bp).
However, metal sector’s weight has bounced off its lows of sub-1% in FY16, but it is far off from the peak of 8.1per cent in FY11. With inclusion of Vedanta in the benchmark, the sector weight will increase to 2.6 per cent (+130bp).
Among the other sectors, cement and real estate have no representation in the Sensex, it said.
The report pointed out that the aggregate weight of the existing Sensex stocks will decline by 50bp. Of the 10 stocks to be most impacted in terms of weight, four are from the financial sector.
Ten stocks to be most impacted (in terms of weight) by the reshuffle are HDFC Bank (-6bp), Reliance Inds (-5bp), HDFC (-5bp), Infosys (-4bp), ITC (-4bp), ICICI Bank (-3bp), TCS (-3bp), L&T (-3bp), Kotak Mahindra Bank (-2bp) and Maruti (-2bp).
Top-10 stocks currently contribute 66.1 per cent of the Sensex. Post reshuffle, this is likely to come down to 65.7 per cent (-40bp).
Over the years, the sectoral representation in the Sensex has undergone a sea change in consonance with the changes in the underlying economy – new sectors have evolved, while some of the erstwhile dominant sectors have lost relative importance in the new India, the report said.