Samvat 2070 has been the year for investors in the stock market in the past five years with the benchmark indices – the S&P BSE Sensex and the CNX Nifty – rallying nearly 26% each. Earlier in Samvat 2065, the benchmark indices had zoomed 104%.
As many as 260 stocks from the BSE-500, mid-cap and small-cap indices have appreciated more than 100% in Samvat 2070. Of these, 114 have rallied more than 200% during the year, data suggests.
The rally has been backed by sustained foreign institutional investor (FII) flows and participation of domestic mutual funds, which have bought aggressively. The formation of stable government of Narendra Modi-led Bharatiya Janata Party (BJP) in centre also fuelled the rally.
During the last Samvat, FIIs have invested net amount of $16.9 billion (Rs 102,256 crore), while domestic mutual funds made net inflow of Rs 11,934 crore in equities market, the Sebi data shows. Investors' wealth measured by the total market capitalization of BSE, surged by a huge Rs 24.45-lakh crore to Rs 93.14 crore in Samvat 2070.
Mid-caps outperform
As many as 260 stocks from the BSE-500, mid-cap and small-cap indices have appreciated more than 100% in Samvat 2070. Of these, 114 have rallied more than 200% during the year, data suggests.
The rally has been backed by sustained foreign institutional investor (FII) flows and participation of domestic mutual funds, which have bought aggressively. The formation of stable government of Narendra Modi-led Bharatiya Janata Party (BJP) in centre also fuelled the rally.
During the last Samvat, FIIs have invested net amount of $16.9 billion (Rs 102,256 crore), while domestic mutual funds made net inflow of Rs 11,934 crore in equities market, the Sebi data shows. Investors' wealth measured by the total market capitalization of BSE, surged by a huge Rs 24.45-lakh crore to Rs 93.14 crore in Samvat 2070.
Mid-caps outperform
The rally in the mid-and small-cap segment has been better with the BSE Mid-cap and BSE Small-cap indices appreciating 72% and 52%, respectively during the year.
Avanti Feeds, Marksans Pharma, Gati, TVS Motor Company, Ceat, JK Lakshmi Cement, Global Offshore Services, Kitex Garments, CCL International and LG Balakrishnan are among mid-and-small-cap index that have become multi-baggers.
Sectorally, capital goods, consumer durables, auto, banking and pharma index have rallied between 40-60%.
Larsen and Toubro, Axis Bank, Maruti Suzuki India, Indian Oil Corporation, Lupin, BHEL, Bharti Infratel and Tech Mahindra are from the frontline stocks gained more than 50%.
Meanwhile, Jindal Steel and Power, Jaiprakash Associates, Jet Airways, Reliance Communications, Sun TV Network, DLF and L&T Finance Holdings have seen their market value erosion of more than 20%.
Outlook
Avanti Feeds, Marksans Pharma, Gati, TVS Motor Company, Ceat, JK Lakshmi Cement, Global Offshore Services, Kitex Garments, CCL International and LG Balakrishnan are among mid-and-small-cap index that have become multi-baggers.
Sectorally, capital goods, consumer durables, auto, banking and pharma index have rallied between 40-60%.
Larsen and Toubro, Axis Bank, Maruti Suzuki India, Indian Oil Corporation, Lupin, BHEL, Bharti Infratel and Tech Mahindra are from the frontline stocks gained more than 50%.
Meanwhile, Jindal Steel and Power, Jaiprakash Associates, Jet Airways, Reliance Communications, Sun TV Network, DLF and L&T Finance Holdings have seen their market value erosion of more than 20%.
Outlook
Analysts suggest that the next leg of up move in the markets will be led by an overall improvement in macros, which in turn, act as a catalyst for growth in corporate earnings. However, they do warn of risks emanating from a possible slowdown in global growth and its impact on the economy and markets.
“Markets have witnessed a strong rally in the last eight months, which has so far been aided by the deeply beaten down valuations. Going ahead, we believe that acceleration in earnings growth will drive the markets forward. We expect the performance of various domestic cyclical sectors to continue improving going forward on the back of the improving economy and policy environment,” points out Dinesh Thakkar, chairman and managing director at Angel Broking.
While most analysts believe the US Federal Reserve (US Fed) to keep interest rates unchanged till the middle of 2015, they suggest that any unexpected tightening of US monetary policy will be negative for global equity markets.
European central bank, too, has carried out a fresh monetary stimulus by bringing deposit rates into negative territory. European economies continue to show weakness and the current round of stimulus should help stabilise European economy.
For FY15, we would expect a Sensex EPS growth around of 15%. We would expect earnings growth to accelerate once investment activity is revived and average at 20-25% for the next several years. Considering that the valuation in several sectors like Public sector banks, capital goods and Infrastructure are extremely subdued, we would expect significant outperformance from these sectors in the next few quarters,” points out Varun Goel, head of portfolio management services, Karvy.
“We arrive at a Sensex target of 29,300 based on 16 times FY16 earnings by Diwali and would be buyers at every dip. We maintain our year 2020 target of 100,000 on Sensex,” he adds.
“Markets have witnessed a strong rally in the last eight months, which has so far been aided by the deeply beaten down valuations. Going ahead, we believe that acceleration in earnings growth will drive the markets forward. We expect the performance of various domestic cyclical sectors to continue improving going forward on the back of the improving economy and policy environment,” points out Dinesh Thakkar, chairman and managing director at Angel Broking.
While most analysts believe the US Federal Reserve (US Fed) to keep interest rates unchanged till the middle of 2015, they suggest that any unexpected tightening of US monetary policy will be negative for global equity markets.
European central bank, too, has carried out a fresh monetary stimulus by bringing deposit rates into negative territory. European economies continue to show weakness and the current round of stimulus should help stabilise European economy.
For FY15, we would expect a Sensex EPS growth around of 15%. We would expect earnings growth to accelerate once investment activity is revived and average at 20-25% for the next several years. Considering that the valuation in several sectors like Public sector banks, capital goods and Infrastructure are extremely subdued, we would expect significant outperformance from these sectors in the next few quarters,” points out Varun Goel, head of portfolio management services, Karvy.
“We arrive at a Sensex target of 29,300 based on 16 times FY16 earnings by Diwali and would be buyers at every dip. We maintain our year 2020 target of 100,000 on Sensex,” he adds.