Shares of real estate firms have been outperforming over the past year. The rally, analysts say, may hit roadblocks in the near term amid stretched valuations, even as the long-term prospects for the sector remain ebullient. "Most of the positive news flow is already in the price. Hence, investors sitting on hefty profits may partially cash out at current levels," suggests V K Vijayakumar, chief investment strategist at Geojit Financial Services.
The benchmark Nifty50 managed to reclaim its 200-day moving average (DMA) on Wednesday but about half of top 500 stocks continue to languish below this key technical indicator. The 200-DMA - nearly a year's average of closing prices - is analysed by traders to understand the market sentiment. A fall below these levels indicates a weak trend.
The "asset-right" strategy, reiterated by ITC chairman Sanjiv Puri during the company's 112th annual general meeting (AGM) on August 11, received a thumbs up from the analysts. They, however, believe that sustained earnings growth and synergies with the demerged hotel's vertical will help the stock break out from the ongoing consolidation. "The stock is expected to consolidate between Rs 420 and Rs 450 in the near future.
Amid cooling raw material prices, the crude-oil linked companies, which includes paint and tyre firms, have been on a roll over the past one year. Shares of related companies have gained up to 84 per cent, as against a 14 per cent rise in the S&P BSE Sensex. Analysts, however, believe stretched valuations in both these sectors could trigger a de-rating.
The share of listed public sector undertakings (PSUs) in the overall market capitalisation has hit a three-year high of 11.4 per cent. This comes on the back of the sharp outperformance of the PSU pack over the past two years. In 2021 and 2022, the BSE PSU index gained 41 per cent and 23 per cent, respectively. Market participants said a combination of factors like value buying and bullishness, particularly in public sector banks (PSBs), were the reason for the improved prospects.
Logistic players have seen a sharp correction at the bourses over the past six months as intense competition from new-age-tech startups, higher freight rates, and weak macros dented listed players' growth outlook. Analysts warn that the emergence of tech-based startups could weigh on organised players' profit-pool, and can potentially erode their market share. Thus, a stock-specific strategy would be prudent at this juncture with focus on companies that are rapidly innovating and investing in technology.
With the merger between HDFC Bank and HDFC Ltd complete, analysts said the next key monitorable for the Street would be successful resolution of merger-related hiccups, including employee-related churn and roll out of complete banking services across branches. At the bourses, they expect the stock to perform in-line with the benchmark indices in the near-term. "There's usually an initial period of consolidation after a merger as the entities work towards integration.
Auto Expo 2023 may not trigger a fresh rally in automobile stocks, say analysts, as this year's edition lacks participation from major listed players. It is also owing to the focus on electric vehicles (EVs), a segment where four-wheelers have minuscule market share. "In the passenger vehicles (PV) segment, Maruti Suzuki India and Tata Motors are the only listed players.
This correction has given a good entry for long-term investors. One should buy quality stocks and those with growth potential.
Low home loan rates by banks could put large players in an advantageous position over smaller non-bank players, believe analysts.
Next set of Q4 FY16 earnings, progress of monsoon along with election poll outcome will dictate market trend this week
The S&P BSE Sensex shed 42 points to close at 25,838 and the Nifty50 lost 13 points to end at 7,899.
Sensex surged 486 points or 1.9%.
The S&P BSE Sensex ended down 371 points at 24,966 and the Nifty50 closed 101 points lower at 7,615.
BSE Auto was the top sectoral loser with a 4.6% fall followed by realty sector down 3.7% and consumer durables 3.6% post disappointing IIP numbers
Top gainers from the Sensex pack are Asian Paints, Bajaj Auto, ITC, NTPC, L&T and HDFC, all up 2% each
The S&P BSE Sensex slipped 305 points to end at 25,400 and the Nifty50 dropped 87 points at 7,783.
Indices reversed all its losses during late trades.
Sharp fall in capital goods production and manufacturing activity also dented sentiments.
The broader markets, however, outperformed the benchmark indices -- BSE Midcap and Smallcap indices ended up 0.6%-1%.
Top 5 losers include Infosys, TCS, ITC, M&M and HUL.
Patanjali, to a large extent, has penetrated the target group for its products. As a result, increasing the consumer base and revenue by 100 per cent in FY18 will be a stiff challenge.
Taking control of manufacturing will help boost profits for the food business, but it could leave the group saddled with huge debt.
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