Investors on Dalal Street became richer by nearly Rs 15 lakh crore in just 40 trading session, as sustained buying in largecap stocks as well as fund inflows by domestic institutional investors supported market sentiment.
The total market capitalisation of all the BSE-listed firms soared to around Rs 159 lakh crore on August 28 from Rs 144 lakh crore on July 2. However, falling rupee, US-China trade war concern and weakness in emerging market currencies kept market participants cautious.
Benchmark equity index BSE Sensex closed at a fresh record high on Tuesday, while the NSE Nifty index ended above the 11,700-mark for the first time ever.
On further movement of the equity market, Arun Thukral, MD & CEO of Axis Securities in an interaction with ETNow said, “Nifty is inching towards 12,000 and medium to long-term, we are very bullish on the market and as well as the economy. But yes, there will be short-term jerks coming in betw een. We are advising our investors to keep pumping money on all these jerks and triggers.”
In terms of wealth creators, oil-to-telecom behemoth Reliance Industries added over Rs 2.25 lakh crore to its market capitalisation during the period. Share price of the company jumped 37 per cent to Rs 1,318.20 on August 28 from Rs 961.10 on July 2.
Still, brokerage Kotak Institutional Equities has reiterated Sell rating on the stock with a target price of Rs 985.
“Our reverse valuation exercise suggests that investors have not only priced in a robust energy segment performance in RILs current valuations, but also ascribed the enterprise value (EV) of leading players in key sectors that are being targeted by RILs platform narrative—Bhartis India business (telecom), Avenue Supermarts (retail), Flipkart (e-commerce) and key players in the media sector (content ecosystem),” Kotak said in a report.
Tata Consultancy Services has added Rs 80,381 crore to its market cap since July 2. ITC (Rs 59,890), State Bank of India (Rs 40,919), ICICI Bank (Rs 39,591), Axis Bank (Rs 38,027 crore), Bajaj Finance (Rs 36,788 crore) were among other top grossers in terms of m-cap.
Also, market capitalisation of HDFC Bank, HUL, ONGC, Coal India, Bandhan Bank, Indiabulls Ventures, Infosys, Bajaj Finserv, Dabur Maruti Ultratech Cement, HCL Technologies, Wipro, Nestle India, Larsen & Toubro, Godrej Consumer Products, Sun Pharma, JSW Steel, NTPC, Havells, Piramal Enterprises, M&M, HDFC, Asian Paints and Shree Cement increased by over Rs 10,000 crore during the period.
In terms of share price, companies such as Adani Power, Adani Green Energy, SORIL Infra Resources, Adani Enterprises more than doubled investors wealth during July 2-August 28.
Other names including Atlas Jewellery Sharp India, Tiaan Ayurvedic & Herbs, Alora Trading Company, Sawaca Business Machines, Birla Cable, Danube Industries, Sport King India, SPL Industries, Gangotri Textiles, Zenlabs Ethica, Diamines & Chemicals and MM Rubber rallied 100-191 per cent.
All the sectoral indices on the BSE moved northwards since July 2 with FMCG index rallying 13 per cent, followed by Oil & Gas (up 11 per cent), Healthcare (up 11 per cent), Power (up 10 per cent), Bankex (up 9 per cent), IT (9 per cent).
Hemang Jani, Head – Advisory, Sharekhan by BNP Paribas, said, “On the earnings front Q1FY19 numbers have been above expectations and we remain confident that rural demand will pick up in the coming quarters. With government focusing on cleaning up the banking sector there may some short-term pressure on banking names, but the worst is behind.”
Jani prefers stocks in the private banking space and feel that they will outperform their PSU peers. Stocks such as HDFC Bank and RBL Bank remain among preferred picks. He also believes that market will continue to be volatile in the short term on the back of global fund inflows and general elections in 2019. “Any correction should be used by investors to add quality companies,” Jani said.
Capital Goods, Teck, Consumer durables, Metal, Auto and Realty index also rallied up to 8 per cent during the past 40 trading sessions.
Foreign portfolio investors have poured over Rs 4,000 crore in domestic equity markets since July this year. However, they offloaded shares worth Rs 6,000 during the first half of 2018. On the other hand, net investment of domestic institutional investors stood over Rs 71,000 crore on YtD basis.
For investment perspective, global brokerage CLSA has recommended few largecap stocks for investors. The financial services firm sees value in HDFC (target price: Rs 2,480), IndusInd Bank (Rs 1975.95), Infosys (Rs 1,560), ITC (Rs 390), Mahindra & Mahindra (Rs 1,120), Maruti Suzuki (Rs 11,300) and Sun Pharma (Rs 750).