Sectoral indices outperform Sensex in 2007

While market bid adieu to 2007 on a positive note on Monday with the benchmark Sensex showing a gain of 47 per cent this calendar "" its best gain in four years "" the stars of the year were metals, capital goods and oil & gas indices, which have more than doubled in the last 12 months.

In a year, which saw several hiccups "" unwinding of yen-carry trades in February, sub-prime turmoil in August and Participatory Note curbs in October "" the BSE Metal Index was the best performer among all indices with a gain of 121.47 per cent, followed by the Capital Goods Index, which posted 117 per cent this calendar. In 2008, capital goods sector looks most promising, according to experts.

Says Paras Adenwala, Chief Investment Officer, ING Vysya Mutual Fund, "Capital goods sector is certainly an outperformer because companies in this sector provide visibility in terms of earnings growth. However, they look somewhat expensive at this time but will continue to outperform next year as well because of their huge order books."

BSE Oil & Gas, which rose 115 per cent this year, also had a robust performance, thanks to the rising prices of Reliance Industries this year. Reliance Industries, a heavyweight on the index, gained by 125 per cent (or Rs 1,600 per share) from Rs 1,281 to Rs 2,881 this year.

The PSU Index has clocked a growth of 73.5 per cent with NTPC and MMTC leading the herd. Consumer Durables Index surged 94 per cent. Banking Index returned 61 per cent this year with private banks such as ICICI and HDFC Bank remaining in the limelight.

The year 2007 also saw the launch of two new indices "" Realty and Power "" to capture growing investor appetite to stocks in these two fast-growing sectors.

The Realty Index has leaped by 81 per cent since its launch in June, thanks to companies like DLF and HDIL, which have doubled since their debut. The Power Index was launched in November, but it gained only 0.4 per cent since then.

Some of the worst performers in 2007 were healthcare, FMCG and the IT sector. FMCG has grown only 20 per cent this year followed by healthcare which gave 16 per cent returns.

The BSE IT Index was the worst as it showed negative returns of 14.09 per cent this year. Auto and Technology indices posted only a marginal increase, growing by 2 per cent and 9 per cent respectively.

Other indices such as BSE 500 and 200 also fared well, climbing 63 per cent and 60 per cent respectively, outperforming the benchmark Sensex.