What! Here are 3 sectors that lost twice as much as Sensex

The benchmark Sensex lost a steep 25 percent in 2011. But seven sector indices lost more heavily than that in the same period.

Overall, 12 out of 13 sector indices posted double-digit falls, of which three sectors lost twice as much as the Sensex. Only the fast-moving consumer goods index emerged unscathed from the investor battering, gaining 7 percent for the year, according to Ace Equity database.

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The most damned sector of 2011 was real estate. Realty stocks suffered the most as high debt levels led to high interest costs amid declining demand for most companies. HDIL was the biggest loser among real estate stocks - its shares lost a jaw-dropping 71 percent - as lack of government approvals delayed launch projects (which, incidentally, is a sector problem). The only stock from the realty index to gain was Godrej Properties, which gained 5.5 percent in 2011.

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The next worst-performing sector is metals: the BSE metals index dropped 46 percent. The biggest loser was SAIL, whose shares tanked by 60 percent.

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The capital goods sector tumbled 45 percent for the year over sluggish order book positions and a rise in cheap imports from China. Leading companies like BHEL, Crompton and L&T lost 48 percent, 62 percent and 45.6 percent, respectively.

Power stocks also lagged, surrendering nearly 40 percent. Policy logjams and high borrowing costs were the main culprits for dragging shares lower.

Next in line was the public sector undertaking index, which declined by 32 percent as disinvestment blues hit most of the stocks in the index. Investors stayed away from these scrips due to regulatory uncertainties, execution delays and lack of government steps on divesting stakes in many of these companies.

The constant hikes in key policy rates impacted the banking index, which surrendered 30 percent this year. Following the Reserve Bank of India’s moves, rate-sensitive stocks like SBI, IDBI and ICICI plunged 40-50 percent. Higher rates cut down demand for credit, even as an economic slowdown heightened fears of rising bad loans. Kotak Mahindra Bank was the only stock that remained in positive territory with a 2.8 percent gain.

The oil and gas index tanked by 28 percent, led by a steep 65 percent fall in the market value of Essar Oil. State-run HPCL, BPCL and IOC recorded double-digit losses due to subsidy-sharing concerns. Petronet LNG was the only stock that rose by almost 28 percent.

Overall, Indian stock markets struggled to rise above the burdens of high inflation, high interest rates and slowing corporate earnings. A snowballing eurozone crisis has also put off foreign investors, who have been major sellers of stocks after pouring in $29 billion last year.