Why is Spencer's Retail falling/rising?

Steep Decline Against Market Benchmarks

The stock's performance over recent periods starkly contrasts with the broader market indices. Over the past week, Spencer's Retail has declined by 9.10%, while the Sensex has only dipped marginally by 0.63%. The divergence widens over longer horizons, with the stock falling 14.38% in the last month compared to a 2.27% gain in the Sensex. Year-to-date, the stock has plummeted by over 50%, whereas the benchmark index has advanced by nearly 9%. This underperformance extends to one-year, three-year, and five-year periods, where Spencer's Retail has consistently lagged behind the Sensex, which has delivered robust returns in contrast.

Recent Trading Activity and Technical Indicators

On 08-Dec, the stock closed at ₹40.25, down ₹2.35 or 5.52% from the previous close. Intraday, it touched this low, marking a fresh 52-week and all-time bottom. The weighted average price indicates that a larger volume of shares traded closer to this low price, signalling selling pressure. Furthermore, Spencer's Retail is trading below all key moving averages—5-day, 20-day, 50-day, 100-day, and 200-day—highlighting a sustained bearish trend from a technical perspective.

The stock has also recorded a consecutive two-day decline, losing 7.47% in this short span, underscoring persistent negative sentiment among investors. This downward momentum is compounded by the retail sector's own weakness, which has fallen by 2.09% on the same day, indicating that sectoral headwinds may be contributing to the stock's slide.

Declining Investor Participation and Liquidity Considerations

Investor engagement appears to be waning, as evidenced by a sharp drop in delivery volume. On 05 Dec, the delivery volume was 28,070 shares, which represents a 51.55% decline compared to the five-day average delivery volume. This reduction in investor participation may be exacerbating the stock's downward trajectory, as fewer buyers are stepping in to support prices.

Despite the decline, the stock remains sufficiently liquid for trading, with the current liquidity supporting trade sizes of approximately ₹0.01 crore based on 2% of the five-day average traded value. However, the liquidity has not been enough to arrest the slide amid prevailing negative sentiment.

Sectoral and Market Context

The retail sector's modest decline of 2.09% on the day suggests that Spencer's Retail is underperforming its peers, as it fell by 5.52%. This underperformance relative to the sector by 3.43% indicates company-specific challenges or investor concerns that are weighing more heavily on Spencer's Retail than on the broader retail industry.

Summary and Outlook

In summary, Spencer's Retail's share price decline on 08-Dec is driven by a combination of factors including sustained underperformance relative to the Sensex and its retail sector peers, technical weakness with the stock trading below all major moving averages, and diminished investor participation. The fresh 52-week and all-time low price reflects ongoing bearish sentiment, while the broader retail sector's decline adds to the pressure. Investors should monitor whether the stock can stabilise or if further downside is likely amid these challenging conditions.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →