Hot inflation melts 7 of every 10 stocks in June so far. Here're worst performers

NEW DELHI: June proved a good month for equities in the previous two years. But this year seems different.

Hot inflation has hurt sentiment globally. Last week, it was the RBI that hiked the policy rate by 50 basis points, and this week, a similar rate hike is likely by the US Fed. This has triggered a risk-off trade, with seven of every 10 stocks in the broader BSE500 index in the red so far this month.

In total, 362 of BSE500 stocks have delivered negative returns this month and this excludes Monday's fall -- the day the index cracked 2.5 per cent intraday.

Hikal alone has fallen 19 per cent to Rs 266.95 a piece in the initial sessions of the month. Swan Energy, V-Mart Retail and Adani Power have tanked 14 per cent each this month. Gujarat Gas, Shree Cement and The Ramco Cements have fallen 12-13 per cent each.

Stocks such as Brightcom Group, Delta Corp, Birla Corporation, Info Edge (India), LIC Housing Finance, ICICI Lombard, Coforge, JSW Energy, Vakrangee and Piramal Enterprises are some other stocks which have fallen over 10 per cent each.


Most of these stocks have fallen over weakening fundamentals, or/and rising competition or/and rising valuation concerns.

"It is not a pleasant sight to be looking at the markets this way, but it is not unexpected. This whole year is going to be a weak year from the returns perspective and while the market has seemingly corrected to less than 16,000 on Nifty50, I really do not think that we will still be making positive returns from here on in the remainder of the year," said Mahesh Nandurkar of Jefferies told ET NOW.

My sole advice is do not panic, said Dinshaw Irani, CIO, Helios India.

"These are the times that will test even astute investors. The data points coming out of the US are very scary. The 8.6 per cent US inflation -- the US has not seen that in the last 40 years and so its central bank does not know how to deal with it. They are in uncharted territory right now. In India, May could be less than the previous print because we have handled crude domestically. India is on a better footing in managing these kinds of high inflations," Irani said.

At the time of writing this story, the BSE500 index has fallen 5 per cent so far this month, the worst monthly fall since March 2020.

The index had climbed nearly 2 per cent in June last year and surged 8 per cent in June 2020. It fell, but marginally, in the preceding few instances.

"One should be out of weak sectors and stocks that s/he is not comfortable with. That is what we have been advising. We have been cautious all along, since the beginning of this year, talking about the calendar year as such and we continue to be so. But that does not mean we do not work towards identifying opportunities to pick as and when there is panic in the market," Irani said.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)