Gold Silver Reports – Samvat 2073 proved to be rewarding for most sectors on Dalal Street, barring healthcare; while other sectoral indices on BSE surged up to 43% since last Diwali, the BSE Healthcare index slipped 13%.
In a pre-Diwali survey conducted by ETMarkets, a dozen domestic brokerages made bullish projections for equities in the new Samvat, with consumer discretionary, financials, infrastructure and metals sectors widely expected to outperform. However, most market experts advised avoiding the IT and pharma sectors.
During Samvat 2073, BSE Metal index surged the most 43%, followed by Consumer Durables (up 42%), Realty (up 40%), Telecom (up 36%), Oil & Gas (up 28%), Bankex (up 24%), FMCG (20%) and Capital Goods (up 17%). Equity benchmark BSE Sensex advanced 17% between October 30 last year and October 17 this year.
Among the laggards, BSE Auto (up 13%), Power (up 12%), Tech (up 8%) and IT (up 4%) indices underperformed benchmark index during the year.
The domestic economy saw two game-changing events during the year -the demonetisation drive in November 2016 and GST rollout in July 2017. Both these reforms are structural in nature and are going to change the way business activities are undertaken in India. The aftereffects of demonetisation have receded while that of GST is likely to show up Q2FY18 numbers, after which the market is expecting things to get streamlined.
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Despite good rainfall in 2016, the demand environment has remained weak due to the after-effects of note ban, but things are expected to improve in the second half of FY18.
Most of the market experts are positive on the consumer discre tionary sectors. “We are upbeat on the rural consumption theme. We expect select stocks and sectors to outperform the markets on back of improving rural economy following the two-good monsoon and shift from informal to formal economy after implementation of GST. We are optimistic about the consumption sector be it select FMCG companies and consumer durables, automobiles and auto ancillaries, discretionary consumption, housing related segments like housing finance, home improvement etc. on back of expected rural economy revival,“ brokerage Axis Direct said. Axis Direct is also positive on select NBFCs and private banks with retail focus, given the humongous opportunity available for serving the underserved bottom of the pyramid segment of the society .
- 1 “With state elections lined up for 2018 as well as some state and general elections scheduled for 2019, some of the brokerages expect the infrastructure sector to benefit from rising government spending on infrastructure while select media stocks are likely to gain from electoral spends of political parties.
- 2 Some brokerages believe the chemicals and textile sectors will perfor m in Samvat 2074 where Indian companies have an advantage over their Chinese counterparts in the exports market.”
- 3 Financials, Metals and Infra Best Bets for Samvat 2074 | Neal Bhai Reports | Gold Silver Reports
“With state elections lined up for 2018 as well as some state and general elections scheduled for 2019, some of the brokerages expect the infrastructure sector to benefit from rising government spending on infrastructure while select media stocks are likely to gain from electoral spends of political parties.
Some brokerages believe the chemicals and textile sectors will perfor m in Samvat 2074 where Indian companies have an advantage over their Chinese counterparts in the exports market.”
“In the near to medium term, we are positive on all consumption re lated sectors like autos, consumer durables, retail. We are also positive on the metals space given the im provement in global prices, pro government policies and an expect e d r ev iv a l i n d e m a n d f r o m infrastructure and housing space.
On the other hand we believe that ANIRBAN BORA both IT and pharma could continue to see pain given the structural is sues in their respective industries,“ said YES Securities.
Almost all the brokerages includ i n g I C I C I S e c u r i t i e s, G e o j i t Financial Services, Centrum Broking, Anand Rathi Financial Services, Angel Broking and Motilal Oswal gave `avoid’ ratings to the IT sector in the new Samvat years. Four brokerages gave `nega tive’ ratings to pharma.
Commenting on sectoral bets for Samvat 2074, ICICI Securities said, “We are positive on the consumer space (namely auto, FMCG and con sumer durables), banking and infra structure (capital goods, cement) and are negative on pharmaceuti cals and IT amidst growth challeng es and currency headwinds.“ – Neal Bhai Reports
