If 2002 was the year of debt with yields touching the nadir, 2003 could well be the year of equities. According to analysts and fund managers, there are several factors that confirm the trend and as figures suggest, large-cap stocks will lead the rally.
An analytical performance of the top 100 stocks on the Bombay Stock Exchange (BSE) by market capitalisation for the last two years show an interesting trend. For calendar 2001, when the sensex posted a negative return of 17.9 per cent, the stocks posted a negative return of 6 per cent.
Further, in calendar 2002, when the sensex posted a positive return of 3.5 per cent, the stocks delivered a return over ten times at 39.9 per cent.
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The 100 stocks have shown remarkable resilience under pressure and have beaten the market by a huge margin by moving out in 2002, a fund manager said.
National Fertilisers (up 4.68 per cent), Hinduja TMT (3.86 per cent), HMT (3.65 per cent), Engineers India (3.32 per cent), Kotak Mahindra (3.32 per cent) and Rashtriya Chemical (2.94 per cent) were among the top 30 best performing stocks during the year.
The worst performers included Hindustan Lever (down 4.2 per cent), Bharati Televentures (down 1.3 per cent), HCL Technology (0.9 per cent), MTNL (down 0.8 per cent), Cipla (down 0.6 per cent) and Reliance Industries (down 0.6 per cent).
Interestingly, the 100 stocks account for around 82 per cent of the market capitalisation of the current market cap on the BSE of around Rs 610,000 crore. The daily volumes in the stocks (as an average for last three months) have been about Rs. 964 crore, which is around 70 per cent of the daily market turnover.
As the head of investment head from a leading mutual fund house said,