Suzlon, KPIT Tech, RIL, IRFC, HDFC Bank, Infy: 56% Nifty500 stocks in bear grip amid market sell-off

Indian equity benchmark indices have extended their weakness for the eighth straight week, breaking a record set 25 years ago. In 2001, Indian stock markets posted losing streaks for nine weeks, while the absolute longest losing streak for the Nifty was 10 weeks in 1993. The current sell-off has pushed the benchmark indices closer to their 52-week lows, but the pain is severe in specific stocks.

According to data from AceEquity, more than 56 per cent of the constituents of the Nifty 500 index are in bear-market territory. In absolute numbers, as many as 282 equity shares out of the top 500 names are down at least 20 per cent from their recent 52-week highs. The Nifty 500 index accounts for 92.04 per cent of the free-float market capitalisation of all stocks listed on the National Stock Exchange Ltd (NSE).

A stock or index is considered to be in bear-market territory when it drops 20 per cent or more from its recent 52-week high. In fact, nearly 20 Nifty 50 stocks are in bear-market territory. It should be noted that more than a dozen stocks have crashed more than 50 per cent from their recent peaks, while over 100 stocks have wiped out one-third of investors' wealth from their peaks.

Indian markets continued to bear the brunt of sharp foreign fund outflows and accelerating US bond yields due to the raging conflict in the Middle East, said Ankur Punj, Managing Director, Equirus Wealth. Investors are perturbed by elevated crude oil prices and the resultant decline in the rupee against the dollar, leading to a broad market sell-off in domestic equities, he said.

Stocks like Reliance Power and KPIT Tech have cracked 62 per cent each from their 52-week highs, followed by KEC International, Inox Wind, Kaynes Technology India, Avanti Feeds and Brainbees Solutions, which are down 55-60 per cent from their respective 52-week highs.

Jain Resource Recycling, Intellect Design Arena, Rail Vikas Nigam, Cohance Lifesciences, Bata India and PB Fintech have crashed at least 50 per cent from their peaks. Afcons Infra, Swiggy, Tata Investment Corp, Tata Elxsi, Zensar Tech, Godfrey Phillips, Syngene, Swan Corp, JK Tyre, Gallantt Ispat, TARIL, IRFC, Birlasoft, Aditya Birla Realty, Patanjali Foods, Tata Teleservices, PI Industries, Wipro, SBI Cards, Pine Labs and Ircon are down over 40 per cent.

Inflation is a unifying macro theme of the year. Input costs are broadening rather than easing. These pressures are already driving price hikes. The world is in an inflationary boom, not yet an inflationary bust. Domestic equities are feeling the global tremor, with elevated global yields, higher crude and geopolitical anxieties keeping markets subdued, said SBI Funds Management.

The near-term setup can best be described as one of cautious optimism. The global economy is shifting from a liquidity-led era to an investment-intensive one — supportive of nominal growth and capex-linked assets, but bringing higher financing needs, stickier inflation and more volatile bond markets," it added in a note.

Among other top names, ACC, Infosys, ITC, Hexaware Tech, Hindustan Copper, Tata Motors PV, Ambuja Cements, NBCC (India), LTM, IRCTC, Suzlon Energy, GRSE, RailTel Corp, Vedanta Power, Bharat Dynamics, LTTS, Cochin Shipyard, IEX, Jio Financial Services, BSE, Godawari Power, Adani Total Gas, HPCL, Vedanta and HUL are among the stocks in bear-market territory, down over 30 per cent from their peaks.

Stocks like Reliance Industries, IREDA, Dabur, Sobha, Mazagon Dock, HDFC Bank, Bank of Baroda, Trident, Blue Star, ONGC, Canara Bank, IDBI Bank, JK Cement, REC, Adani Energy, Physicswallah, Apollo Tyres, Mphasis, Trent, NMDC, Varun Beverages, Angel One, SBI, Max Healthcare, Adani Power, SRF, Netweb Tech, Adani Green, Power Grid, Tata Tech, Vodafone, Airtel and others are also in bear-market territory.

From an investment perspective, the strongest themes emerging from the discussions were businesses with visible demand drivers, structural industry tailwinds, differentiated capabilities or market positioning, and sufficient capacity to translate these opportunities into incremental growth, said Anand Rathi Share & Stock Brokers Ltd in its G200 Summit note.

"The investment thesis is less about near-term reported numbers and more about the earnings inflection that can emerge as execution catches up with the opportunity — whether through large order-book conversion, new capacity, improving utilisation, product/market expansion or margin normalisation," it added.