BSE500 stocks: Go buy! Carnage leaves 88% of BSE500 stocks in bear territory

Mumbai: As domestic stocks treaded choppy waters, investors appeared to have started nibbling at stocks that have been battered out of shape in the carnage over the past few days.

The market has plenty of blue chips and midcap stocks trading at mouth-watering valuations with nearly 88 per cent of BSE500 stocks trading in the bear territory.

While all the BSE500 stocks traded below their 52-week highs, as many as 438 traded at least 20 per cent below their 52-week highs fulfilling the definition of a bear market, data from Ace Equity showed.

Of these, 16 companies including Reliance Capital, Jain Irrigation Systems, PC Jeweller, Gayatri Projects, Dewan Housing Finance Corporation, YES Bank, Reliance Infrastructure, Reliance Power, Dish TV India, and Allahabad Bank are down more than 80 per cent from their respective 52-week highs.

Around 134 companies have eroded 50-80 per cent value from their respective 52-week highs, and some 288 stock have shed 20-50 per cent from their respective 52-week highs.

Analysts said while it may not be time to go all out and buy, it was probably time to start nibbling in. “We are seeing things that we like five days back are down another 10 odd percent today, maybe 15%. I repeat this there is no way to find a bottom but on the other hand I do not think you should be really looking at all points in time to be a buyer,” said Shankar Sharma, co-founder and vice-chairman of First Global.

Foreign institutional investors, or FIIs, have been net sellers of Indian shares since February 24 and have offloaded a net of nearly Rs 29,261.60 crore of Indian stocks during this period.

On the other hand, domestic institutional investors (DIIs), which largely comprises mutual funds and insurance companies, have been net buyers of Indian shares for all sessions since the same date, and have raked in stocks to the tune of Rs 33,889 crore since then.

According to Manish Sonthalia, associate director and head portfolio management services, Motilal Oswal AMC-PMS, the best way to go about is to buy unleveraged businesses across the market.

“Leverage can really take you to the cleaners. So leveraged businesses are totally out of the question, these businesses if they are structural and good managements if you keep these three things in mind and any of the names that are available it would be a good buy I believe,” said Sonthalia.

Companies which have eroded least value include Bayer CropScience, Hindustan Unilever, Coromandel International, Glaxosmithkline Consumer Healthcare, Wabco India, Sanofi India, Nestle India, Akzo Nobel India, Pidilite Industries and Asian Paints.