Sensex Trades Lower; Realty & IT Stocks Drag

Share markets in India are presently trading on a negative note. Barring consumer durables sector, all sectoral indices are trading in red with stocks in the realty sectorIT sector and energy sector witnessing maximum selling pressure.

The BSE Sensex is trading down by 180 points (down 0.5%), while the NSE Nifty is trading down by 48 points (down 0.5%). The BSE Mid Cap index and the BSE Small Cap index are trading down by 0.9%.

Speaking of the broader share markets, how has the Sensex performed compared to BSE-Midcap and BSE Smallcap during downturns?

Sarvajeet Bodas shares one of the exercises he did to check this and the results that showed up in one of the recent editions of The 5 Minute WrapUp.

Here's an excerpt of what he wrote...

  • The starting point of the exercise was the economic downturn of 2008.

    During this time, the BSE-Sensex was down 38% compared to -54% and -59% of BSE-Mid and BSE-Small index respectively.

    Similarly, during the period of 'policy paralysis' of 2011-12, the large-cap index outperformed both the indices.

    FY16 was an exception where the large-cap index underperformed.

    Nevertheless, during the current calendar year, the BSE-Sensex outperformed by a wide margin and is currently giving a positive return of 6% compared to -17% and -27% of BSE-Mid and BSE-Small indices respectively.

Here's how this data looks like when plotted on a chart...

Large-Cap Index Outperformed in the Downturn

 

Clearly, in the face of such volatility, you need a balance of growth and safety.

Safe stocks will offer you that safety.

To get started, I recommend Tanushree's special report - 7 Stocks To Profit From This Market Crash.

If you are a StockSelect subscriber, you can read the report here.

The rupee is trading at Rs 69.94 against the US$.

The rupee climbed 30 paise in early trade today following weak crude oil prices and losses in dollar because of political uncertainty in the US.

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Disclosure: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. ...

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