Indian stocks: 30% of BSE500 and BSE mid-size stocks, still below the level of 6/4 despite the market rebound

Approximately 159 stocks of the BSE 500 stock price index and 41 stocks of the BSE mid-cap stock are still in the negative zone. Out of 102 listed PSU stocks, 49 have yet to recover from the June 4 decline. In the small-cap sector, 220 stocks of 23% or more are still falling.

Although India's stock price index has recovered from a sharp drop on 6/4, which began with election results, close to 30% of stocks belonging to the BSE 500 Index and the BSE Mid-Cap Index, respectively, have yet to recover. Furthermore, 50% of listed PSU stocks are also below the level of 6/4.

Approximately 159 stocks in the BSE 500 index and 41 BSE MidCap stocks remain in the negative zone. Of the 102 listed PSU stocks, 49 stocks have yet to recover from the 6/4 decline. In the small-cap sector, 220 stocks of 23% or more are still falling.

Meanwhile, SENSEX and NIFTY, which are benchmark indices, have each risen 3% or more since the sharp decline in June. The BSE mid-cap index rose 5% and the small-cap index rose 10%. The BSE 500 index rose 4%.

Thurmax was hit the hardest by the BSE500 and mid-cap stocks, and despite rising 147% or more since 2023/4, it has fallen 23% since 6/4. Although Adani Total Gas and Adani Power have surged 29% and 356%, respectively, since 2023/4, they have yet to recover 21% of losses on 6/4.

Other stocks such as Poonawala Fincorp, RBL Bank, Equitas SFB, Jindal Stainless, RHI Magnesita India, and Macrotech Developers have fallen 17% to 20% since 6/4, after rising 40% to 275% since 2023/4.

In small-cap stocks, Worley Renewable Technologies has fallen 40% since the 6/4 decline, despite rising more than 1,522% since 2023/4. Other stocks such as Fusion Microfinance, Sangvi Movers, Spandana Sforty Finance, NDTV, Rattan India Power, and Medicamen Biotech have also fallen by nearly 20% since 6/4. However, these stocks have risen 30-600% over the past year.

According to analysts, the rise before the election was due to high expectations for the BJP party to win a majority, but the results were disappointing compared to street expectations.

After the election results, the market began trading with an eye on reality, and paid attention to various things on the global stage, such as growth in performance, economic growth, and interest rate revisions by the US Federal Reserve.

According to Prachance Taps, senior vice president (in charge of research) of Mehta Equities, the fact that results for the first quarter grew contrary to expectations is also one of the causes of stock price declines.

Meanwhile, several PSU brands, such as Hindustan Copper, Indian Steel Corporation, NMDC, Engineers India, Container Corporation of India, and MOIL, remain at a level 14 to 17% lower than the level of 6/4.

QIP has achieved returns of 100 to 300% since 2023/4. Analysts believe that the recent surge in PSU stocks was mainly supported by bullish sentiment since there were no major changes in fundamentals or reforms.

In his latest note, Kotak emphasized that there is no fundamental support for this increase, and since they are significantly outperforming compared to their peers in the private sector, their shortcomings have become clear. Investors have stated that they recommend taking this opportunity to close the majority of PSU stock positions.