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What Got In, What Went Out

The month of May saw the Sensex fall by 5%. Find out what the funds bought and sold amidst the turmoil

Of late, the Indian stock markets have been in the news for all the wrong reasons. Whenever we have a market update or breaking news, it's almost always about the markets' downfall. Well, the month of May, 2008 was no different. The markets maintained its losing streak with the Sensex falling by 5 per cent, closing at 16,415. The BSE Mid-cap index also followed on the same lines with a loss of 5.3 per cent. The BSE Small-cap index lost even more - 7 per cent.

In this prevailing turmoil, it would be interesting to see what the fund managers did during the month. Here's an update of the fund managers' actions (buys and sells) in the large-cap horizon. Value Research's large-cap stock universe comprises companies which account for 70 per cent of the total market capitalisation. On 31st May, 2008, a total of 69 companies were classified as large-cap.

Amongst these companies, Tata Consultancy Services (TCS) and Infosys Technologies were the most fancied stocks in May. Their prices went up by 12 per cent and 19 and 18 funds added TCS and Infosys respectively to their portfolios.

Other companies that gained the fund managers' preference this time were Bharti Airtel, Tata Steel, Idea Cellular and Ranbaxy Laboratories. All these stocks have seen significant rise in their prices, with Ranbaxy and Tata Steel gaining around 10 per cent. Surprisingly, fund managers preferred Bharti Airtel even though the stock witnessed a decline of around 2.5 per cent. Bharti Airtel has been a preferred stock in the large cap space and with 14 funds adding it to their list of stocks, its fund count has increased to 165.

However, not all companies had a good time as some were shown the exit doors. State Bank of India was the worst hit. The stock registered a fall of 19 per cent, which is probably the reason for 21 funds making an exit from it reducing its fund count to 131.

Other stocks which got dropped this time around were Reliance Infrastructure, Sterlite Industries, Larsen & Toubro and JWS Steel.

All these stocks witnessed a steep decline in prices, but it was hard luck for Sterlite Industries, which got dropped by 14 funds despite reporting a rise of nearly 8 per cent. Sterlite Industries is held by 92 funds at present.

Sterlite Industries is one of the seven companies that have posted increased earnings in the past two quarters. To find out more about these companies, pick up the forthcoming issue of Wealth Insight (June 2008).