Nearly half of Nifty50 stocks emerge stronger than index from June lows

From the one-year low hit in June, the benchmark index Nifty50 has leapfrogged to a fresh record high in just 5 months even as the global macroeconomic situation remains uncertain and challenging.

On Monday, the Nifty50 hit a record high of 18,614.25 points. The index had hit a one-year low of 15,183.40 points on June 17.

One could not say that the journey from its 1-year low to a lifetime high for the 50-stock index has been possible only because of a handful of stocks if data is anything to go by.

46 out of the 50 stocks in the index have also rebounded, and as many as 41 of them have registered double-digit gains since June.

These include names like

, , , , , Housing Development Finance Corp, , , Mahindra & Mahindra and .

From its June lows, Nifty50 has gained more than 21%, and interestingly, as many as 24 stocks have beaten the index in terms of returns.

The month of November was not good but for many of its index constituents, as 9 stocks, including M&M,

, Bharti Airtel, L&T, and ICICI Bank scaled their respective lifetime highs.

Factors driving the bull run


The comeback by foreign institutional investors has been one of the major driving force behind the recovery in the market. In many of the index stocks, FII holdings are significant.

Between July and November, FIIs have been net sellers of equities in just one month. In this period, FIIs net bought Indian equities worth $10 billion, against selling shares worth $4 billion in the same period of 2021.

“The Indian equity market has managed to attract foreign investors and the credit goes to the steady performance of the Indian economy despite the global headwinds of the ongoing military war, fluctuating fed rates and fear of recession knocking on the door,” said Manoj Purohit, partner and leader – financial services tax at advisory firm BDO India.

Purohit expects the aggressiveness by FIIs in pumping cash into equities to continue in the coming months as well. Apart from the flows, the better-than-expected corporate earnings, easing domestic inflation, and robust tax collections have also helped keep India in a good stead against the global peers.

This is evident from the performance of the stocks, that largely have domestic-growth driven names like automobiles, banks, consumer staples,

and infrastructure. The export-oriented information technology stocks, which have the second highest weightage on the Nifty50, have also seen a strong rebound amid easing of selling pressure in their global peers.

But, market experts see the domestic-oriented sectors doing better than the export-backed sectors given that uncertain global situation.

“We remain constructive on Indian equities. As structural bets, we like the banking space, capex-linked capital goods, domestic consumption

plays including autos,” said Pankaj Pandey, head of research at ICICIdirect. With the stars shining bright on India, bulls look charged up for the race to take Nifty50 towards the 19,000 mark.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)



Source link

Leave a comment