The Indian stock market has crashed more than 7 per cent since May 4
Markets sank for the fifth session on Thursday. Both Sensex and Nifty declined over 2 per cent each, tracking extremely weak global trends and heavy selling by foreign institutional investors. The Indian stock market has crashed more than 7 per cent since May 4 — the day RBI had in a surprise move announced to hike the repo rate, citing inflation concerns. Barring the May 5 session, the indices saw negative closing daily since then.
While Nifty has crashed around 1224 points and the Sensex has plummeted 3,969 points — both by more than 7 per cent since the RBI’s decision.
The current downfall saw many stocks trading at a price that investors would have barely imagined after the marathon rally post-pandemic last year that took the index to 18,604.45 on October 19. Bluechip stocks too have seen a handsome correction while many are near their 52-week lows. Smart investors are those who use these falls as a good opportunity to pick fundamentally strong stocks.
Why bluechip stocks?
Bluechip stocks are the most preferred destination for investors to park their funds. These stocks are ideal for investors who want secure and consistent returns because they come with minimum risk.
| Stocks near 52-week lows | ||
| Scrips | 52-week low | Market price (NSE, May 12 closing) |
| HDFC AMC | Rs 1,810.05 | Rs 1,840.05 |
| HDFC Bank | Rs 1,292 | Rs 1,303.05 |
| Bharat Petroleum | Rs 331.10 | Rs 339.95 |
| Divi’s Laboratories | Rs 3,788.95 | Rs 4,233.40 |
| Amara Raja Batteries | Rs 493.50 | Rs 500.10 |
| Wipro | Rs 462.15 | Rs 473.80 |
| ICICI Securities | Rs 462.20 | Rs 473.30 |
| Godrej Industries | Rs 434.95 | Rs 438.90 |
| Nestle India | Rs 16,126.75 | Rs 16,220 |
| Hindustan Unilever | Rs 1,901.55 | Rs 2,138.80 |
| Dabur India | Rs 494.20 | Rs 498.35 |
| Naukri | Rs 3,500 | Rs 3,539.50 |
| LIC Housing Finance | Rs 321 | Rs 331.90 |
| Aurobindo Pharma | Rs 560.25 | Rs 570.75 |
| PNB Housing | Rs 316 | Rs 320.90 |
| SAIL | Rs 79.80 | Rs 80.70 |
| Crompton Greaves | Rs 337 | Rs 345.85 |
| Aarti Industries | Rs 725.10 | Rs 740.70 |
Rachit Chawla, founder & CEO, Finway FSC, said that bluechip stocks are a good source of investment. These stocks are the best of the best. Speaking about the strategy investors should look for in the current volatility. He said there is evidently massive volatility in the global market, which can be considered as the primary reason for the bluechip stocks falling.
“The pace of earning upgrades has slowed down in the present market and some sectors might also witness the downgrade earning cycle. Also, the interest rates are rising and clearly, there is pressure in good stocks,” he said.
In such a volatile market, investors should make comprehensive research to identify the best-performing companies, he said. “Bluechip stocks have always tended to offer more stable and predictable returns. Companies with a track record of steadily growing trajectory and dividends that can withstand the occasional recession can be considered reliable for the long run. Further, with the rising interest rates and geopolitical tension, it is more sensible to invest in the bluechip stocks.”
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