Powered by funds flowing in from foreign institutional investors (FIIs) and domestic mutual funds, the markets have been trending up, with the S&P BSE Sensex and the CNX Nifty marking fresh highs.

However, among individual stocks, RIL and ITC that have a weightage of 7.40 per cent and 11.68 per cent, respectively in the S&P BSE Sensex are the only two counters in the index record negative returns since the poll results were announced.

These two have recorded a combined 232 points decline in the S&P BSE Sensex post election results till Friday. While ITC has declined five per cent to Rs 349 levels now from Rs 368, shares of Mukesh Ambani–controlled RIL has lost around 5.4 per cent around Rs 996 levels from Rs 1,053 on May 15, on the BSE.

Analysts attribute this fall to a host of reasons, including the recent announcements that came in as a negative for ITC.

Says Tirthankar Patnaik, director (institutional research), Religare Capital Markets: “ITC has lost ground partly because of tax worries that investors had. The Union health minister had advocated rise in value added tax rates that states levy on tobacco. As regards RIL, there was an initial euphoria until the elections but that faded away. RIL has also sent an arbitration notice as regards the gas pricing. The rise has been deferred by the new government and there are no triggers for this stock as of now.”

Since May 15, the BSE Sensex has rallied 10.6 per cent or 2,531 points from 23,906 to close at 26,437 on Monday, August 25, 2014. The index hit a new high of 26,630 in intra-deals on Monday.

Among stocks, HDFC, ICICI Bank, Axis Bank, HDFC Bank and State Bank of India from the financials have contributed nearly one-third or 768 points to the up move. Automobile stocks such as Tata Motors, Mahindra and Mahindra, Maruti Suzuki India, Bajaj Auto and Hero MotoCorp have collectively contributed 460 points; while Infosys, Tata Consultancy Services and Wipro contributed 445 points.

Of the 30-share index, as many as 14 stocks contributed more than 100 points each in Sensex rally. These companies collectively contributed 2,222 points in benchmark index movement.

Five stocks - HDFC (272 points), TCS (218 points), Sun Pharmaceutical Industries (217 points), Infosys (194 points) and ICICI Bank (159 points) - have collectively contributed nearly 1,060 points rise in benchmark index since May 15.

Given the market rally, R Sreesankar, head of institutional equities, Prabhudas Lilladher feels that some stocks are already priced ahead of the fundamentals. However, he continues to believe that given the optimism in the economy, the financials will have a good run.

ITC, Britannia, ING Vysya and Engineers India were left out from his recent top pick recommendations in a recent report, while Tata Chemicals, Tech Mahindra and Bank of Baroda got included.

Patnaik of Religare, however, prefers ITC at the current levels and remains a buyer in this counter. He prefers ONGC in the oil and gas pack compared to RIL, as the former will benefit more from the hike in gas prices.