Mixed message: Sensex again high but investors low

While the Senbad gained nearly 8% in rupee, it's thanks to the outperformance of a handful of titles.

With nearly 80% of the global market in the red, very few investors applaud record Senbad levels reached on Monday. With 36,718.60 points, the benchmark has remained stable in dollar terms since January while the Dow is up 1.4%. While the Senbad gained nearly 8% in terms of rupees, it's thanks to the outperformance of a handful of titles. The broader market underperformed, with the MidCap ESB losing nearly 14% and the SmallCap BSE dropping 7.5% between January and now.

For perspective, 77% of all stocks with a market capitalization of 1000 crore and more are in the red. In addition, more than a third of these 764 shares lost more than a quarter of its value

As Merrill Lynch of the Bank of America said, is the Indian version of a "Fin-Tech". The notation supports the index among a correction. The spectacular stocks were Tata Consultancy Services (TCS), Kotak Mahindra Bank, HDFC, HDFC Bank, Infosys and Reliance Industries.
Another set of stocks, both in the Nifty 50, which were stellar artists are Bajaj Finserv, which has risen 32.4% since January, and Bajaj Finance, which has achieved nearly 57%. Among the large caps, Bajaj Finance is the most performing stock in 2018, followed here by TCS with 48.5% and Bajaj Finserv.

Of the 50 Nifty companies, 30 are listed in red. At Monday's close of 11,084.75 points, the Nifty is now just 46 points from its record close of 11,130.40. However, the mid-cap Nifty index, at 18,255.20, is down 13.6% since January.

At 36718.60, the Senbad benchmark is trading at a price-earnings multiple (PE) of 18.15 times expected earnings at one-year premium of 12.4% over the long-term average PE of 16.03 times. This compares with 8.6 times for the South Korean Kospi and 14.1 for the Jakarta Composite. Brazil's Bovespa and the Shanghai Composite are trading at a multiple of 10.8 and 10.6, respectively, Bloomberg data show.

The small size of the market probably kept foreign portfolio investors (REITs); Since April, REITs have sold $ 3.03 billion worth of shares, most of them in May. However, national institutions were buyers for $ 6.4 billion. Local purchases since January reached nearly $ 10.2 billion while foreign funds sold $ 820 million worth of shares.

UBS Securities, which reiterated its underweight position in small and mid-cap indices for 2018, concerns. The brokerage noted that inflows into local mutual funds remain positive but have slowed in the first three months of 2018. "Despite the correction of small and mid-caps, their Nifty valuation premium is maintained above over the peaks of 2007-08 ", writes UBS Securities in a recent note.