Receding FII inflows, poor corporate performance, and uncertainty on the domestic macro-economic front have sent several stocks to their 52 week lows in the last 10 days.
According to the data from Bloomberg, the major global provider of 24 hour financial news and information including real time and historic data, around 40 percent of the BSE stocks hit their 52 week low since the markets crashed on August 5 following the downgrade of S&P.
Of the 2, 833 stocks listed in BSE, 1, 129 hit year lows in the last 10 days against about 80 that hit year high.
On Tuesday alone, 272 of the BSE stocks hit their 52-week lows, while 30 companies hit their 52 week high.
The major stocks which saw their 52 week low is given below.
What is the main reason for this drastic correction....????
When we observe the stocks listed in BSE, we can see that about 57 percent of the stake of the BSE companies is owned by promoters and Indian Government, who basically BUY and HOLD the securities.
The active trading of the securities is carried out by FIIs, there by controlling the flow of the market and stocks.
The next important thing is the rate hike of RBI. The increase in the interest rates by the RBI has also put company margins under pressure. In the last 16 months, the RBI increased the interest rate by 425 bps, which leads to weaker domestic earnings. Another 25bps interest hike is expecting from RBI soon.
Emerging markets such as India have started looking unattractive to foreign investors. I think this negative trend only lasts for short term point of view.
" We are probably very close to the lows of the year; the reason I don't emphatically say this is the buying moment is we have an inflation problem in the big emerging markets" Said Mr. Adrian Mowat, the chief Asia and emerging-markets strategist at JPMorgan, in an interview to Bloomberg.
Experts are divide on whether the current market situation is conductive for investments. Some fund managers say that the time may be right for investors to look out for companies with good growth prospects and buy into the shares for long term gains. However others feel that the markets will drift further. Which will be correct.....??? Lets see.... :-)
Regards Hari " लोका समस्ता सुखिनो भवन्तु "
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