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Old economy is back with a vengeance

Jul 7, 2000

The last one-year has seen the markets pass through such peaks and troughs that it would make a roller coaster squirm. New economy stocks are largely to blame for this. But check out who's in the driving seat now.We ran two queries in our 'Market Stats' section. The first query was to list out the top gainers over the last one year in the BSE 'A' group. The other query was to find out the top gainers in the BSE 'A' group over the last one month. The results are an eye opener.

Top gainers over the year Top gainers over the month
Name Return Name Return
HFCL1253.3% L&T48.0%
SSI588.7% Tata Power37.8%
Global Tele437.8% Wipro31.8%
ICICI Bank435.4% Sterlite29.0%
Satyam387.5% Century Ind28.9%
Infosys352.8% Corporation Bank27.4%
Sun Pharma281.9% Cipla26.3%
HDFC Bank274.4% Bank of Baroda24.5%
Wipro272.4% Hotel Leela23.9%
Sterlite225.6% Sun Pharma23.3%

While over the year it is the new economy stocks that dominate in terms of returns generated, over the last one-month the old economy stocks seem to have stolen the limelight. Surprising that just six months back even the thought that old economy stocks would be in the driving seat would have been laughed at.

Another interesting fact to note that of the old economy companies that have made it to the top 10 list, four are restructuring their operations - L&T (cement division demerger), Tata Power (merger and telecom thrust), Sterlite Industries (metal business demerger) and Century Ind. (cement plant sale).

June certainly seems to have been a good month for the old economy stocks. But whether they would be able to draw in funds in a sustained manner would depend on two key factors. First, whether these companies continue to restructure their operations to maximize gains and generate growth in both topline and bottomline. Second, what would be the investment climate surrounding the new economy stocks. If new economy stocks were to once again come in favour, funds would once again be diverted, while on the other hand funds could rush into old economy sectors.

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