Shock Market: Index yearly return charts slip into red

Synopsis

Raichura said any bounces in the near term may create more selling pressure and a decisive recovery will occur only in large-caps first, and then in mid- and small-caps. "And until we see a strong recovery, investors may not entirely return to the stock market," he said.

Mumbai: The stock market's near one-way decline since late September has wiped out all gains made by Indian benchmark indices in the past year. Benchmarks Nifty 50 and Sensex are down 1.4 and 1.2%, respectivelyon, on the yearly returns charts, whereas Nifty's Smallcap 250 is down the most, dropping 7.7%. The erosion of yearly returns tends to have implications on investors' confidence. Brokers said investors-especially individuals-hesitate to put fresh money into the market, discouraged by the contracting values of their holdings.

"We have seen volumes drop by over 40% compared to last year's peak in the cash market," said Sandip Raichura, CEO-retail broking and distribution at PL Capital. "This is due to first-time investors who are seeing their first correction and exiting , along with large clients like treasuries and HNIs (high networth individuals) unwilling to bet big in the current weak scenario."

Agencies

Raichura said any bounces in the near term may create more selling pressure and a decisive recovery will occur only in large-caps first, and then in mid- and small-caps. "And until we see a strong recovery, investors may not entirely return to the stock market," he said.

This is only the third time in history where 90% of Nifty 500 stocks are below their 200-DMA levels, said Narendra Solanki, head fundamental research-investment services, Anand Rathi Shares and Stock Brokers. The 200-Day moving average is at 24,070 levels currently. "Usually in such cases, there are bounce backs in the market, but the beginning of such a recovery is not yet in sight."

The Sensex and Nifty are down over 17% and 18%, respectively, from the peaks made on September 27, 2024, while the Midcap 150 index is down 20.3%, Smallcap 250 index is down 24.4% and the Microcap 250 is down 23.8% in this period.

Shares in the midcap and smallcap segments fell the highest, with individual names down as much as 55-67%. Tata Motors, IndusInd Bank and Adani Enterprises were top losers on Nifty 50, at over 30% each, whereas Bharti Airtel, M&M and Bajaj Finance were top gainers.

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