Sensex slips after hitting record highs but over 50 stocks hit a lifetime high on BSE

The S&P BSE Sensex, which started with a small gap on the upside, was enough to take out its previous landmark high of 33,865.95 on 7th November to hit a fresh record high of 33,956.31 on Wednesday.

The bulls failed to keep the momentum going beyond the opening tick and the index quickly pared gains and slipped in red in mid-morning trade. The Nifty50 was also hovering around 10,450 levels after hitting a record high of 10,494.45 levels.

Even though benchmark indices failed to hold on to gains but more than 160 stocks hit fresh 52-week highs while as many as 55 stocks rose to a fresh record high so far in trade today.

As many as 161 stocks on the BSE hit a fresh 52-weeks high which include names like OFSS, HDFC Bank, SRF, Emami, Jet Airways, GAIL, M&M Finance, Motherson Sumi, Tata Global Beverages, Jindal Steel, Bombay Dyeing etc. among others.

As many as 55 stocks out of 161 hit a fresh record high on the BSE which include names like Maruti Suzuki, Yuken, Atul, M&M, Shriram Transport Finance Corp, Subros, SpiceJet, Aarti Industries, Bharat Wire Ropes etc. among others.

The S&P BSE Midcap index also made it to a fresh record high of 17,445, led by gains in Crompton Greaves, Amara Raja Batteries, Reliance Communications, NALCO, JSW Energy, Emami, NBCC, Wockhardt, and M&M Financial etc. among others.

The S&P BSE Smallcap index too witnessed a historic day as the index rose to a record high of 18,686.03, led by gains in Arihant Superstructures Ltd, Morepen Labs, MTNL, Nagarjuna Agri, Kirloskar Bros, Hestor Bioscience, ITI, Readymade Steel, ZEE Learn etc. among others.

The S&P BSE Small and midcap index has outperformed the main benchmark index by a wide margin. The S&P BSE Midcap index is up over 40 percent while the S&P BSE Smallcap index rose by over 50 percent so far in the year 2017 compared to 26 percent rally in Sensex.

The mid-cap index has outperformed its large-cap counterpart by a considerable margin over the last 4 years, which has pushed the former’s valuation at life-time highs.

Even when compared to the Nifty’s P/E at 26.6x TTM earnings, the Mid-cap 100 index valuation is at near 100% premium, which was not the case until a couple of years back, wherein the latter traded at a discount.

“Some part of the rich valuation now can be attributed to the fact that earnings have been relatively subdued over the past 2-3 quarters, as India Inc. adjusted to government’s reform measures i.e. demonetization and GST,” Jayant Manglik, President, Retail Distribution, Religare Securities Ltd told Moeneycontrol.

“Moreover, expectations of a strong recovery amongst mid-cap companies have helped sustain the rich valuations. On the mid-caps index front, despite the rich valuations in general, there are still pockets of relatively attractive valuations, which investors can look at from an investment perspective,” he said.