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Investors Bet on 10% of Stocks as Benchmark Indices Plummet
17 Aug
Summary
- 90% of stocks trade 10-96% below 52-week highs
- Benchmark indices down 6-10% from 52-week highs
- Experts advise caution, favor quality large-caps
In August 2025, the Indian stock market is facing a challenging period, with investors becoming highly selective in their stock picks. According to data, a staggering 90% of the total traded stocks are currently trading 10% to 96% below their respective 52-week highs, significantly underperforming the benchmark indices.
The benchmark Sensex and Nifty have fallen 6.10% and 6.04%, respectively, from their one-year highs in September 2024. The broader BSE Midcap and BSE Smallcap indices have also traded 9.36% and 10.25% below their 52-week highs.
Experts are advising caution in the current market environment, favoring quality large-cap stocks over small-cap and mid-cap counterparts. Saurabh Mukherjea, founder of Marcellus Investment Managers, notes that many small-cap and mid-cap stocks have seen their share prices double in the past three years without a commensurate improvement in their fundamentals. As a result, he believes the prudent approach is to focus on high-quality large-cap stocks trading at sensible valuations.
Echoing similar views, Siddarth Bhamre, head of research at Asit C Mehta, says the market's current thought process is not very constructive, as earnings are not great and valuations are becoming expensive due to the influx of liquidity. He adds that mutual fund investors have not made substantial absolute returns in the last two years.
