Business Desk | AHMEDABAD Indian equity market continues to witness strong growth. In the first 100 days of Prime Minister Narendra Modi's third term, the Sensex has gained an average of 11000 points or 15%. The market has remained strong despite concerns over the increase in capital gains tax and the BJP not being able to secure a majority on its own in the Lok Sabha elections. Sensex rose from 72079.05 points on June 4 to 83079 points now. While the investors' capital has increased from 395.31 lakh crores to 470.30 lakh crores, thus the average capital has increased by 75 lakh crores. Considering Gujarat's average share of 10 percent, the capital has increased by more than 7 lakh crores. Not only equity, but also in the primary market, Gujarati companies have given good returns to investors.
The 100-day journey coinciding with PM Modi's birthday has seen an underwhelming performance from smallcap stocks, with at least 18 stocks posting multibagger returns. The smallcap index rose 19%. Importantly, the IT and Healthcare indices emerged as the top sectoral gainers with returns of 22% each.
Top stocks giving returns up to 221 percent The consumer durables sector has been at the forefront with a 17% return in the first 100 days. In contrast, metals fell by over 3%. Top smallcap stocks include Refex Industries 221% in just 100 days, PC Jeweler 175%, Balu Forge Industries 167%, Gravita India 131%, PG Ele. 118%, Godfrey Phillips India 114%, and Newland Laboratories 103%.
Jefferies – Corporate earnings will remain strong due to GDP growth Factors such as tax hike on equity capital gains, possible slowdown in government capital expenditure and policy risks have strongly contributed to this cautious sentiment. Global brokerage firm Jefferies is optimistic that we show a bullish trend in the long-term perspective as corporate earnings remain strong due to GDP growth. Domestic flows may decline to more sustainable levels in the near term but foreign flows may improve. After the Jefferies interest rate cut, foreign investment will increase which will support investment in large cap companies.
Prabhudas Leeladhar- Festive demand-interest rate cut will support Domestic brokerage firm Prabhudas Leeladhar rates the Nifty at a price-to-earnings ratio of 20.2x and a bull case target of 28,564. Brokerages expect strong festive season demand, rural revival and interest rate cuts to support the markets. Sectors like consumer durables, building materials, IT, pharma and telecom will remain positive. Although valuations of smallcap and midcap are very high in the Indian stock market, new tops are being formed in this sector on a daily basis. Investors are making huge profits in the primary market as well.
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
