Capital market stocks such as Kfin Technologies Ltd, CDSL, Motilal Oswal Ltd, and Angel One Ltd have fallen up to 45 per cent from their 52-week highs. Here’s why
Amid the persistent sell-off in the domestic equity market, capital market stocks saw a steep decline on February 24. The Nifty Capital Market Index, which tracks the performance of stocks from the Nifty 500 Index which represents the capital market theme, closed 1.34 per cent lower at 3,367.5.
The biggest losers were Central Depository Services Limited (CDSL) and Nuvama Wealth Management, both falling 3.5 per cent from their respective previous close. Angel One Ltd, Indian Energy Exchange (IEX) Ltd, and Bombay Stock Exchange (BSE) Ltd also fell between 2.5 and 3.5 per cent.
Motilal Oswal Financial Services and Aditya Birla Sun Life AMC fell 1.87 per cent and 1.49 per cent, respectively. Other capital markets stocks such as Multi Commodity Exchange (MCX), Computer Age Management Services (CAMS), HDFC AMC, and Nippon Life India Asset Management also ended the day in the red.
However, a few capital market stocks managed to defy the trend. 360 ONE WAM saw a gain of 2.62 per cent, UTI AMC rose 1.7 per cent, Kfin Technologies was up by 0.64 per cent, and Anand Rathi gained 0.47 per cent.
At the day’s close Kfin Technologies has bled the most from its 52-week high, plummeting 44.6 per cent, followed by Motilal Oswal, which has fallen over 43 per cent. CDSL has corrected 39 per cent, CAMS has dropped more than 36 per cent, while Angel One and Nippon have declined by 35 per cent.
IEX has crashed 32.8 per cent, UTI AMC saw a decline of 31 per cent, Nuvama Wealth Management has dropped 29.5 per cent, and ABSL AMC fell over 28 per cent. 360 ONE WAM also saw a decline of 23.4 per cent, MCX is down 21.4 per cent, HDFC AMC depreciated by 22.2 per cent, and Anand Rathi fell 13.8 per cent.
On the contrary, BSE saw the least decline, dropping just 6 per cent from its 52-week high.
Since October, the domestic equity market has been falling consistently, with the headline indices - Sensex and Nifty - falling13.4 per cent and 14.17 per cent, respectively, from their record highs. This persistent selling has dampened investor sentiment, as reflected in the slowing pace of new demat account openings. In January 2025, just 2.83 million new accounts were opened, the lowest since November 2023, and down from 3.26 million in December. This is also below the 2024 monthly average of 3.84 million.
As investor confidence continues to wane, capital market companies are expected to feel the impact on their earnings. Data from BSE and NSE shows that the combined average daily turnover in the cash market fell below Rs 1 lakh crore in February, the first time since November 2023. This is also the eighth consecutive month of declining turnover.
With declining market participation, these companies are likely to see a reduction in their assets under management (AUM) and client base, which could potentially affect their earnings going forward.