One out of every five stocks from the S&P BSE500 index is down more than 25% from their respective one-year highs following a sharp decline in their market values in past one week.PC Jeweller, Vakrangee, Just Dial, Wochardt, Unitech, Aban Offshore, Rain Industries, Jindal Saw, Praj Industries, Jai Corp, Bombay Burmah Trading, Philips Carbon Black and Bombay Dyeing & Manufacturing, among notable stocks, were down more than 25% each.Three comapnies from Anil Dhirubhai Ambani Group (ADAG) – Reliance Power, Reliance Naval and Engineering and Reliance Communications – were down more than 25% from their respective one year highs. All these stocks hit their one year highs in the month of January 2018.At 01:41 PM; the S&P BSE 500 index slipped 1.9%, while the S&P BSE Sensex down1.5% amid the Budget 2018 proposal to levy 10% long term capital gains tax (LTCG) on sale of equity investments. The S&P BSE Midcap and S&P BSE Smallcap index down 2.6% and 3.4%, respectively.“The government’s decision to impose long-term capital gains tax on equity investments will certainly be a dampener on foreign institutional investors (FII) investments into the stock market. That can have consequences not just the stock markets but potentially also for our balance of payments and forex reserves going forward,” V. P Nandakumar, MD & CEO, Manappuram Finance said.According to rating agency CRISIL, the imposition of long term capital gains tax on sale of equity shares and equity-oriented mutual funds was a widely expected move. This could bring in some volatility in the short term even as the proposal to ‘grandfather’ gains made up to January 31, 2018, limits the impact.
Regardless, equity will continue to be a preferred investment option for long-term financial planning.Among the individual stocks, PC Jeweller tanked 60% to Rs 195 on BSE in intra-day trade on back of heavy volumes. However, currently, the stock trading 18% lower at Rs 394, bouncing back more than 100% from day’s low. A combined 121 million equity shares representing 31% of total equity of PC Jeweller changed hands on NSE and BSE so far.“The Company is not aware of reason of sudden decrease in price of equity share of the Company today. However, we would like to assure our investors, shareholders, etc. that the fundamentals of the Company remain strong,” PC Jeweller said on a clarification with reference to decrease in price.We affirm that none of our promoters has diluted its stake in the Company and none of their shares are pledged as collateral with any institution, it added.
|High price||Price in Rs|
|Company||Date||1-year high||Latest||% chg|
|Reliance Nav. Eng||02/01/2018||72.60||40.25||-44.6|
|H F C L||11/01/2018||36.65||27.10||-26.1|
|Jindal Stain . Hi||11/01/2018||252.00||186.55||-26.0|
|Latest price on BSE in Rs at 01:41 PM|
|List of stocks that hit one-year high in January, 2018Source: CapitalinePlus|