LIFE has come a full circle for those investors who entered the market in early 2006, as the Sensex falters back to the 10K level after a gap of 28 months. The index’s return journey, however, has been so painful that many blue-chip stocks led by IT are currently quoting much below the levels recorded when the index had touched the five digit figure for the first time. The investors, however, can take solace from the fact that their investments in few select index heavyweights like Reliance Industries (RIL), Bharti Airtel and SBI, have actually shown some growth during Sensex’s journey from 10K to 10K.
The benchmark index had achieved the 10K milestone on February 6, 2006, when it had shot up to 10,003 during intra-day trading, before ending with a gain of 238 points at 9,980. Any investments done at those levels have fetched mixed returns for investors. The list of the underperformers is longer than the outperformers. A comparison between share prices on February 6, 2006, and Friday showed that out of 163 A-group stocks traded on these two days, 88 underperformed while the remaining 75 outperformed the market during the period.
Investors have witnessed a massive erosion in their wealth in leading corporates from IT, banking and other prominent old economy sectors.
IT major Wipro hit the worst among the underperformers, with its market cap recording a loss of Rs 32,417 crore in absolute terms, the biggest among the 163 top market cap companies. Wipro is followed by TCS with the figure of Rs 32,177 crore. Bajaj Holdings, Suzlon Energy, Tata Motors, Indian Oil, HCL Technologies, ICICI Bank and Hindalco, are a few other notable examples where investors have lost between Rs 7,000 crore and Rs 18,000 crore.
“Some sectors like IT, have been underperformers both during the bull and bear phase, because of bleak industry prospects. Banking sector, particularly ICICI Bank, was overowned by FIIs and so bore the brunt of the massive sell-off by FIIs over global banking and financial turmoil,” said Karvy Stock Broking V-P Ambareesh Baliga. ICICI’s market cap has been eroded by nearly Rs 8,000 crore during Sensex’s journey from 10K to 10K. Some of the 10K to 10K investors find themselves lucky as their investments in select blue chip companies led by RIL are still positive. RIL’s market cap has gone up by Rs 1,20,000 crore between February 6, 2006 and October 17, 2008. The list of major outperformers also includes Bharti Airtel, SBI, NTPC, HDFC Bank and SAIL.
Source: Economic Times
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