Major stock indices raked in solid gains for investors last week as India’s Inc’s earnings outlook in this ongoing results season is expected to be the best ever in four years.
The BSE Sensex and Nifty clocked gains of 2.5 and 2.3 percent for the week as investors favoured large-caps over mid- and small-caps. While the BSE Mid- and Small-cap indices exhibited signs of stability though, but they just made moderate gains for investors rising 0.26 and 0.85 percent the last week.
Reliance stole the limelight last week powering ahead with gains of over 12.5 percent driving the bellwether indices to reclaiming their previous highs.
Reliance is the second company after TCS to enter the $100 billion market cap. The Sensex and Nifty rallied to a high of 36548 and 10929 points the last week. The belwether indices recliamed the new highs in six months of touching a high back in January 2018.
Banks and oil and gas companies also shone in the limelight. HDFC Bank and HDFC stood among the gainers, while Kotak Mahindra Bank too rose higher as investors remained selective in large caps in a few counters.
India Inc is expected to clock an earnings growth of over 25 percent in the coming weeks, as per analysts.
Bulls had the upper hand for most of the week even as oil prices dipped 6.9 percent as Libyan oil is expected to resume supplies in the global oil market. Investors brushed aside the global trade war news that could slow down global growth if it escalates to a full scale trade war.
IT and Financial services sectors gained 3.7% and 2.1%, while the energy sector zoomed 7.6% riding on the Reliance stock’s solid gains.
Stock markets are on a firm footing going into the next week as earnings season has kicked off in good form. The early bird results is expected to drive frontline indices higher in the coming weeks.
Broad market indices are, however, exhibiting subdued performance. The carnage selling in mid- and small-cap stocks has slowed down, but stocks are yet to regain investor confidence.
As the rally is not broad-based, investors are advised to be extra selective and stay with companies that are exhibiting good momentum and where the smart money continues to remain bullish.
