BSE Sensex: Who’s to blame? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

BSE Sensex: Who’s to blame?

May 23, 2000

In recent weeks many investment ‘gurus’ have come out in defence of technology stocks. Well, they should because they were the ones that egged on the markets in their irrational journey to sky high valuations in the first place. We at Equitymaster picked up two stocks – Infosys and Zee, both of which command a considerable weightage in the BSE Sensex, in an attempt to draw out a correlation with the Sensex. Of these two Zee, was added only earlier this year. Of course other Sensex stocks have also witnessed a decline, but their weightage is not as significant as of these two stocks. The results are for all to see.

Both the stocks seem to have contributed in no small measure to the slide on the bourses. Currently they account for 19% of the Sensex, as compared to well over 25% at the height of the boom in TMT stocks - implying that their valuations have declined faster than the average decline in other stocks.

The slide in the markets continues unabated. The reasons for this are many, some of which are rational (largely pertaining to technology stocks), some irrational (relation to some high value old and new economy stocks). In the near term there seem to be no positive news flowing in to put a stop to this. The next question - When will it be time to reenter these stocks? That there is actually a story in the tech stocks has not been denied. It is just that the valuations became unacceptable. When to reenter may be a very difficult question in a market as pessimistic as ours is. But in such a market, the time is likely to come sooner than later.

Equitymaster requests your view! Post a comment on "BSE Sensex: Who’s to blame?". Click here!


More Views on News

How Much Money Should an Investor Set Aside for Trading? (Fast Profits Daily)

Sep 21, 2020

In this video, I'll give you a simple equation which you can use to decide how much money you can set aside for trading.

Kotak Standard Multicap Fund: Strategizing Growth with Focused Approach (Outside View)

Sep 21, 2020

PersonalFN's analysis on the features and performance of Kotak Standard Multicap Fund.

Sensex Can Go to 25,000 Before it Goes to 60,000. Are You Prepared? (Profit Hunter)

Sep 21, 2020

Am I expecting a big crack in the Sensex and what next?

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

Sundaram Bluechip Fund: Will Hold the Stable Horses (Outside View)

Sep 18, 2020

PersonalFn briefly outlines the newly launched NFO note HSBC Corporate Bond Fund.

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why am I Recommending Caution? (Fast Profits Daily)

Sep 9, 2020

This is why I have changed my short-term view on the market.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Sep 22, 2020 09:23 AM