High Fliers Continue To Be Pulled Down

Even as markets continued to haemorrhage through new ‘bottoms’ every week, this one has been a particularly tough week for our green pack too. All stocks falling on any day is no longer the rarity it was just a month ago, and today was no exception. Reliance backed Sterling and Wilson Renewable  and Waaree Renewable Technologies Limited , both EPCs, were one of the few to buck the trend, but with really no specific reason other than bottom fishing perhaps.

The wind energy firms, Suzlon and Inox Wind had a particularly tough time of it, with Suzlon slipping below the psychologically crucial Rs 50 level. Premier energies also slipped below the Rs 900 level comprehensively, even as Waaree Energies also suffered losses. Quite simply, while the lower circuit breakers were a common sight in green stocks outside our list, even this group fell harder than the broader market.

Most of the doldrums can be attributed to the uncertainty injected into global trade and supply chains, thanks to the rising crescendo of a US-China trade war. The US has done most of the talking and threatening until now, and actual tariffs as they begin to bite into Chinese imports will lead to retaliation as well. For India, Chinese efforts to manage the fallout, be it through a devaluation of the Yuan or dumping in other markets including India, is a significant risk that the market is still figuring out.

A time for extreme caution, with the proviso that fundamentally sound firms and businesses will invariably find their true value in time. Going by the pronouncements of many of the managements in our green pack, and their existing order books, it is safe to say that value buying will emerge in this category soon. But not before there is a degree of clarity on the likely impact of US actions on India, particularly.

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