Zomato, Star Health among BSE500 stocks that tanked up to 20% in volatile week

New Delhi: The last week of June was a mixed bag for domestic equity markets as benchmark indices settled with marginal gains.

Weak rupee, persistent FII numbers, looming fear of recession and inflationary pressure continued to weigh on sentiments. However, strong auto sale numbers and decent GST collection in June lifted sentiments.

Benchmark indices - BSE Sensex and Nifty50 - gained less than half a per cent each, whereas midcap and smallcap indices gained up to a per cent each.

Among sectoral gainers, power, utilities and capital goods sectors advanced 3 per cent each, followed by FMCG, realty and metal indices, which gained 2 per cent each. On the contrary, telecom and banking shares disappointed the most.

Leading indicators suggest improving prospects for banking, IT, telecom and autos, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"Stock price movements in the near-term will be in anticipation of better-than-expected Q1 results in these segments. Metals stocks are likely to bottom out absorbing the poor Q1 results," he added.

In the BSE 500 index, 300 stocks delivered positive returns. However, only 10 stocks were able to deliver double-digit gains.

Bajaj Electricals rallied about 14 per cent to Rs 1041.3 as the company announced the formation of a unified lighting business segment by combining its consumer lighting business and its professional lighting business.

IIFL Wealth Management was another top performer as it gained 13 per cent to Rs 1543.9 after the company appointed Nikunj Kedia as Head of Products. Recently, CCI approved the acquisition of a stake in the company by BC Asia Investments.

Auto ancillary firm Jamna Auto Industries also surged 13 per cent during the week on the back of a healthy growth outlook. Amid rising automobile sales, the scrip settled at Rs 124.9 during the week.

Gautam Adani-led Adani Transmission gained about 12 per cent to Rs 2,402.70 during the week. The company was on the radar of traders due to its strong technical setup.

Tube Investments of India, Grindwell Norton, BASF India, Metro Brands, Responsive Industries and Dr Lal Pathlabs were other counters which posted double-digit returns during the week.

On the contrary, only five stocks dropped 10 per cent or more. The list of losers was topped by Zomato which plunged about 20 per cent to Rs 56.1 after the company's board approved the acquisition of Blinkit in an all-stock deal.

Market analysts and investors gave the Rs 4,447.5 crore Blinkit deal a thumbs down due to the higher valuations and more cash burn, which will hurt Zomato's path to profitability.

The deal is on expected lines, said Credit Suisse, adding that the acquisition will likely raise Ebitda loss for the next two fiscals. Another brokerage, Edelweiss noted that Blinkit’s annualised cash burn stands at Rs 1,290 crore.

Elgi Equipments dropped 12 per cent to Rs 346 on the back of profit booking. The scrip was trading around Rs 390-400 mark in the previous week.

Despite announcing its partnership with IDFC First Bank, Rakesh Jhujhunwala-backed Star Health & Allied Insurance Co dropped 11 per cent to Rs 473.65 during the week. It has corrected over 47 per cent from its issue price of Rs 900.

In the previous month, Motilal Oswal gave a buy rating to the company with a target price of Rs 840, whereas Emkay global has recommended to buy the stock with a target price of Rs 945.

Oil India sank 11 per cent to Rs 213.95 after the government imposed additional excise duty on fuel.

Johnson Controls - Hitachi Air Conditioning India, Bharat Dynamics, Indian Energy Exchange, Indiamart Intermesh and Blue Star were other stocks which tumbled 8-10 per cent during the week.

The domestic equity market is expected to remain volatile due to a slew of market-moving events, said Yesha Shah, Head of Equity Research, Samco Securities. "Investors should pay careful attention to management commentary and select solid fundamental companies in order to focus on the long-term picture," she added.

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