IT, Metal, Capital Goods, Realty outperform in Sensex’s 3000-point rally

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Shares of information technology (IT), metal, capital goods and real estate sector have outperformed the market in the Sensex’s nearly 3,000-point rally in the past 28 trading days.Since December 13, 2017, the benchmark hits its recent low before results of Gujarat state elections, the S&P BSE Sensex surged 2,999 points or 9% from 33,053 levels. The benchmark index hit a new high of 36,052 on Tuesday in intra-day trade.The Nifty 50 index gained 8.4% or 854 points to cross 11,000 marks at 11,046 in intra-day deal today from its 10,193 level on December 13.Indian shares hit fresh record highs for the fifth consecutive session with underlying sentiment helped by strong earnings results from Reliance Industries and optimism about an improving economy.The S&P BSE Metal, the largest gainer among the pack, was up 17% during the period. IT and Realty indices rallied 16% each, while Capital goods index soared 15%. The Consumer goods index too beat the market by gaining 9% during the period.

Sector 13/12/2017 23/01/2018* % chg
Metal 13450 15746 17.1
IT 10861 12641 16.4
Realty 2333 2697 15.6
Capital Goods 18120 20772 14.6
BSE-Smallcap 17982 19728 9.7
Sensex 33053 36052 9.1
Nifty50 10193 11046 8.4
BSE-Midcap 16791 18066 7.6
*Intra-day high at 10:25 AM

Jindal Steel & Power, Steel Authority of India (SAIL), JSW Steel and Vedanta from the metal sector have rallied by up to 78% in past 28 trading days.Motilal Oswal Securities expect metals to continue to report strong earnings growth, with EBITDA increasing 13% QoQ / 29% YoY, driven primarily by higher metal prices.“Combined profit after tax of (PAT) of nine metal companies under it coverage would increase by 35% QoQ / 169% YoY.

Among the large caps, Vedanta and JSW Steel are expected to outperform. Nalco and SAIL are also expected to report robust earnings growth,” the brokerage firm said in Q3FY18 results preview.Tata Consultancy Services (TCS), Mindtree and Infosys from the IT sector were up between 17% and 34%.According to analysts at JP Morgan IT services spending is likely to cyclically firm up/strengthen in 2018. Except for telecommunications and some parts of traditional US retail, we sense growing client confidence across industries spanning BFSI (banking, financial services and insurance), manufacturing, consumer goods, logistics and utilities – even in energy with rising oil prices likely to spur capex in this sector.For India IT to benefit more solidly and sustainably from rising spending in new areas beyond the anticipated cyclical pick-up in FY19, the industrialization of digital theme (of digital projects getting consistently larger to incorporate fuller system integration programs) must hit an inflection point, in our view.Moderate valuations, prospects of gently greater growth (say, 2-3% points higher in FY19) in the wake of synchronized stronger global growth coupled with potential INR depreciation may well see India IT become a counter-consensus sector pick for 2018, the foreign brokerage said in latest report.

Company 13/12/2017 LTP % chg
Jindal Steel 161.35 286.55 77.6
GMR Infra. 17.05 23.45 37.5
Jubilant Food. 1704.50 2288.45 34.3
Mindtree 564.55 754.65 33.7
Adani Enterp. 147.60 197.00 33.5
Reliance Power 36.15 48.20 33.3
Jubilant Life 673.05 888.35 32.0
Vakrangee 372.60 490.15 31.5
Wockhardt 721.40 928.50 28.7
Jain Irrigation 111.80 143.85 28.7
Indian Hotels 120.45 152.30 26.4
S A I L 78.70 97.70 24.1
Supreme Inds. 1146.30 1411.00 23.1
IRB Infra. Devl. 195.55 240.60 23.0
JSW Steel 243.60 295.40 21.3
Indbull. RealEst. 200.50 242.95 21.2
Manappuram Fin. 99.55 119.65 20.2
Biocon 514.85 617.40 19.9
Vedanta 283.95 339.85 19.7
TCS 2627.30 3118.45 18.7
Escorts 668.65 793.00 18.6
B H E L 89.55 106.10 18.5
Larsen & Toubro 1189.00 1407.05 18.3
GRUH Finance 511.75 605.00 18.2
Yes Bank 301.85 355.80 17.9
Torrent Power 258.15 304.25 17.9
Glenmark Pharma. 532.05 625.00 17.5
A B B 1358.35 1595.45 17.5
Tata Elxsi 919.65 1077.00 17.1
Infosys 1003.45 1174.90 17.1
ICICI Pru Life 374.25 437.25 16.8
ICICI Bank 303.05 353.50 16.6
Bayer Crop Sci. 3983.80 4615.95 15.9
NMDC 128.40 148.25 15.5
Siemens 1147.20 1321.55 15.2
Indiabulls Hous. 1183.55 1360.85 15.0
LTP : Last traded price on BSE in Rs at 09:59 AM
From S&P BSE200 index

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