The 30-share BSE Sensex index closed 0.42 per cent higher at 41,340 on Thursday against the close of 41,253.74 on December 31 last year. Overall, the ongoing calendar year witnessed unparalleled disruptions led by the outbreak of Covid-19, which was followed by locking down of economies, thus bringing the entire value chain and economy to a grinding halt.
Going ahead, market analyst AK Prabhakar and Head of Research at IDBI Capital Markets, believes that Sensex can hit 45,000 by next Diwali. He thinks that investors should give 70 per cent exposure to equities, 20 per cent to bond and 10 per cent to gold considering the prevailing market condition.
An average of two months was lost this year due to lockdown, impacting the overall performance of companies in Q1FY21. However, beginning Q2FY21, gradual recovery was seen across sectors led by lockdown lifting, pent-up demand and resumption of industrial activities.
Despite the tumultuous journey so far in 2020, nearly 45 per cent of stocks on the BSE defied gravity and managed to deliver a positive return to investors during the period.
On the BSE, smallcap player Alok Industries climbed over 647 per cent YTD to Rs 22.70. With a gain of between 400-600 per cent, Venus Remedies, Biofil Chemicals & Pharma, Hathway Bhawani Cabletel, Mangalam Drugs & Organics and Adani Green stood among other major gainers in the list.
On the other hand, just 12 companies in the Sensex pack delivered positive with IT majors Infosys and HCL Technologies gaining over 40 per cent each. Reliance Industries, TCS, Asian Paints, Sun Pharma, Nestle, Mahindra & Mahindra, UltraTech Cement, Tech Mahindra, HUL and Titan have gained between 2 per cent and 30 per cent.
Commenting on the recovery in specific sectors, ICICI Securities said, “IT and cement sector has shown resilient performance in Q2 with better-than-expected earnings.” The brokerage added that consumer centric segments such as FMCG, paints, building material also reflected a sharper recovery closer to pre-Covid levels.
Further, the brokerage added that the pharma sector continued to reflect a significant sequential improvement on the back of continued traction in exports markets.
For stock-specific investors, BP Wealth is positive on stocks like Ashok Leyland, Balrampur Chini, Carborundum Universal, City Union Bank, Jubilant FoodWorks, KPR Mills and Polycab India for the next one year.
IIFL Securities likes Reliance Industries, Infosys, ICICI Bank, HCL Technologies and Dr Reddy’s Labs in the largecap space. The brokerage house also prefers Tube Investments, Apollo Tyres, Persistent Systems, JB Chemicals and Security & Intelligence Services in the small and midcap space.
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