The Plunge in even the BLUE Chips shows that there was just no place to hide in Indian Equities in 2008…no matter what is your risk profile.Top Five such selections all plunged into the RED
On January 10,2008 our Sensex recorded an all time high of 21206.77 but closed lower at 20582…From this date till now see how even the top five blue chips have plunged.This was inevitable as the Sensex too plunged and these blue chips have a strong combined weightage of 36.93% in the Sensex.RelianceIndustries alone has a weightage of 15.63% in the Sensex.Prices of these Scrips are in ‘Rs’
|
Sr No |
Five Blue Chips |
Closing on January 10,2008 |
Closing on October 9 ,2008 |
% Capitulation |
|
|
Sensex |
20582 |
11328 |
45 |
|
1 |
Larsen & Toubro |
2104 (4207 adj for Bonus) |
967 |
54 |
|
2 |
Reliance Industries |
3027 |
1650 |
45 |
|
3 |
HDFC Bank |
3129 |
1889 |
40 |
|
4 |
TCS |
975 |
547 |
44 |
|
5 |
Infosys |
1602 |
1254 |
22 |
Some Consolation to those who hold the above is that some other upcoming and touted blue chips in the making like Jaiprakash and DLF have eroded over 80% in the same period !
Ironically it was only HUL ( Hindustan Lever) that has seen it’s share price stay in the Rs 230 range in this period and protect capital this year…However Investors in HUL have not gained in the past Five years as they have in other Blue Chips.
The IT Giant,TCS, has lost 44% of it’s market cap,twice that of it’s competitor, Infosys….The reason is that there has been some heavy selling in TCS even by it’s promoter,the Tatas’, to raise funds for their courageous, high profile and big ticket overseas acquisitions in the Steel and Automobile Sectors
The fear is that these Blue Chips may plunge further as the Sensex seeks lower levels of 10000 and even below…a very real fear as you are convinced of some more pain ahead in Equities….If the Sensex plunges further on current worsening sentiment, the combined sensex weightage of 36.93 % of the five scrips will ensure that these scrips too will plunge
What I’m saying is that there is no hurry to Buy into these Scrips Now for those who are looking for Opportunities and want to invest in relatively safe core scrips