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The Economic Times

A significant majority of Nifty 500 stocks in the red

MUMBAI: Investors of small and midcap companies continue to bear the brunt of the market correction, as 70 per cent of the Nifty 500 stocks have given negative returns year-to-date.

Data show 345 of the Nifty 500 companies are currently in the red in terms of 2019 returns. In the past one week, returns of 68 stocks have turned negative, even as the benchmark Nifty 50 fell nearly 3 per cent, Bloomberg data showed.

The fall in these stocks was steep with over half of the Nifty 500 components witnessing a slump in excess of 10 per cent. Nearly 160 stocks have lost more than 25 per cent of their market value in 2019. The Nifty 500 index is down 5 per cent year-to-date.

Companies embroiled in debt-related issues lead the list of losers. Travel and hospitality company Cox & Kings is the biggest loser in the Nifty 500, as it has lost 97 per cent of its market capitalisation since the beginning of 2019 following a default on its debt obligations. Reliance Communications and Jet Airways lost 95 per cent and 85 per cent of their market value, respectively. Dewan Housing Finance and Coffee Day shares have fallen more than 70 per cent, the data showed.

Nifty500 snip 1

Market participants expect this pressure on small and midcap stocks to continue on account of sluggish earnings and macroeconomic slowdown. Midcap and smallcap stocks have been underperforming the benchmark Nifty 50 since the beginning of 2018. The Nifty Midcap index has fallen 26 per cent since its peak in January 2018, compared with a 10 per cent drop for the Nifty 50 since hitting its peak in January 2019.

Asset management and insurance companies are the biggest gainers in the index during 2019. Shares of Reliance Nippon Asset Management have gained 78 per cent, while those of HDFC AMC have added 72 per cent. Among others, ICICI Lombard General Insurance and HDFC Life Insurance shares gained over 40 per cent during the year.
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