Six sectoral indices hit year lows

BSE Bankex, realty indices worst affected in 2008

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Mumbai, June 23 As many as six key sectoral indices hit their 52-week lows on Monday as the Sensex fell another 2 per cent. The BSE PSU Index , Bankex, Realty, Auto, Power and Capital Goods were the indices that recorded their new 52-week lows on Monday. From its peak in January 2008, the Sensex has tanked 32.6 per cent and these six indices have fallen much more than that.

From thier highs at the beginning of the year, these sectoral indices have fallen by more than half of what they were in January. The Auto index has shed 33.3 per cent, PSU has dipped 45.07 per cent, Bankex has fallen 63.06 per cent, Capital Goods has fallen by 48.8 per cent, BSE Power by 50.8 per cent and BSE Realty by 63 per cent since January.

"With inflation reaching such high levels everyone is expecting the central bank to take measures to rein in inflation. The Reserve Bank of India is most likely to increase the repo rate and the cash reserve ratio. Rising interest rates is bad news for interest rate sensitive sectors — banking, auto, real estate and capital goods," explained Mr Sanjay Someshwarof Ventura Securities.

It is not just these sectors that have taken a beating, but there has been selling all across the board. The Consumer Durables and the Oil and Gas indices are trading around their previous lows as well. The BSE-IT and BSE TECk indices have not been as badly battered as these companies stand benefited from weakening rupee.

Riding high

On the other hand, defensive sectors such as BSE Health Care and FMCG are trading close to their yearly highs. Market men say that these sectors are not affected much by an increase in interest rates or even the rising crude oil prices. "When markets are in a bearish phase, health care and FMCG stocks attract investor attention as these are defensive sectors, which offer fair return even when economy is slowing down," said the head of research at a brokerage