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Glamour stocks lose sheen

It's been just over two months since the BSE Sensex touched its all time high of 6150 points. Yesterday it closed at 4511 - a fall of nearly 1640 points or 26.65 per cent from the peak level.

And for this year, the index is down by 494 points or 10 per cent for this calendar year! Add today's slide of 200 points (till 1300 IST) and the numbers rise further.

What's even more astounding is the fall in the value of the ICE (infotech, communication and entertainment) sector. The action in these three areas was focused on top ten stocks: Zee Telefilms, Satyam Computer, Himachal Futuristic, Pentamedia Graphics, Global Tele-Systems, Silverline Industries, SSI, DSQ Software, Infosys Technologies and Wipro.

These were the glamour stocks of the last six months with brokers recommending them for their future growth potential. Every fund manager invested a substantial portion of his portfolio in some permutation or combination from this basket. It is unlikely that any retail investor following the market did not dabble in some of them.

Though the Sensex has lost 27 per cent from its top, the erosion in the stock prices of these stocks has been much higher. The fall in value in all these 10 glamour scrips is more than 50 per cent and, in some, it is almost 70 per cent from their highs.

Zee Telefilms, the market leader in the media sector, touched a high of Rs 1,630 in February 23, 2000 and closed yesterday at Rs 663. A near-60 per cent fall in value in barely two months. Wipro, the one to start off the infotech rally, has dropped 60 per cent from its recent high of Rs 9,800. Take a look at the table and the picture is clear.

Company	Highest price	High price date	24/04/2000	(% fall from high)
Zee Telefilms	1,630	23/02/2000	663	59.33
Satyam Computer	7,230	07/03/2000	3050	57.81
Himachal Futuristic	2553	08/03/2000	845	66.90
Global Tele-Systems	3550	09/03/2000	1214	65.80
Silverline Industries	1395	22/02/2000	461.35	66.93
Pentamedia Graphics	2344	23/02/2000	732	68.77
SSI	7200	06/03/2000	2820	60.83
DSQ Software	2820	10/03/2000	1001	64.50
Infosys Technologies	13813	08/03/2000	7269	47.38
Wipro	9800	22/02/2000	3960	59.59

Pentamedia Graphics, animation and graphics software major also suffered the same fate, losing as much as 69 per cent from its recent high of Rs 2,344 to Rs 732. Global Tele-Systems, the market favourite in telecommunications, was also not spared. It dropped to Rs 1,214 level from its high of 3,550 in less than two months.

Even the big daddy of all, software services giant Infosys Technologies, could not escape this bloodbath; it has dropped by 47 per cent to Rs 7,269. Satyam Computer, another software major, is also reeling under selling pressure and is off 57 per cent from its high at Rs 3,050.

It is as if that these stocks have suddenly lost their glamour and become untouchables in the market, if one goes by the way they have been dropping daily. Even excellent results could not stem the selling pressure in these stocks.

Infosys announced a 117 per cent jump in net profit for 1999-2000 but the stock has shed more than Rs 3,000 to the current levels of Rs 7,269. Satyam also met with the same fate. After a net profit growth of 87 per cent , Satyam is off Rs ,1000 to the current levels of Rs 3,050.

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