Weakness in the global markets and fears of monetary tightening by the Reserve Bank of India have brought down the Indian stock market sharply since 17 October 2009. The Sensex and the Nifty have lost over 1,900 points and 550 points respectively, till 3 November 2009. Telecom stocks suffered badly during this period on fears that the ongoing price war would slice profitability. Realty and banking stocks too were among the major losers during the period.
Among the equity diversified funds that performed the worst during this period was JM Hi Fi Fund, which crashed by 18% between 17 October 2009 and 3 November 2009 against its benchmark Nifty which was down 11%. This fund is a tiny fund with Rs13.87 crore in assets with exposure to Indiabulls Financial Services, Escorts, Idea Cellular, India Infoline, Aban Offshore, Nitin Fire Protections, Lanco Infratech and Nagarjuna Construction. These stocks were battered heavily during this period. The NAV of SBI Magnum Midcap Fund, which has Rs345 crore in assets, declined 14% while its benchmark index CNX Midcap fell 10%. The portfolio of this midcap fund consists of stocks like Suzlon Energy, Balaji Telefilms, Elecon Engineering, NIIT, Sobha Developers, Ibn18 Broadcast, Great Eastern Shipping and Areva T & D India. Suzlon Energy plunged 35% while Balaji Telefilms and Elecon Engineering declined 27% and 26% respectively. NIIT and Sobha Developers were down 24% each.
DBS Chola Global Advantage Fund was the third worst underperformer. It is a tiny fund of Rs6.06 crore having exposure in Reliance Industries, Dishman Pharmaceuticals, Sterlite Industries, Punj Lloyd, Tata Steel, Everest Kanto Cylinder, Reliance Communication, 3i Infotech, Suzlon Energy and Arvind Mills. While many of these stocks fell sharply in the recent crash, the fund’s performance was particularly hampered by Everest Kanto and Punj Lloyd, both of which plunged a massive 35%.