Around 75 per cent, or 372 stocks, that are part of the BSE500 are trading at least 10 per cent below their all-time high levels, despite the index hitting a record high 20,515 points on the BSE in intra-day trade on Wednesday, surpassing its previous high of 20,390 touched in March 12. The index, which accounts for 93 per cent of BSE listed companies' market capitalisation, has gained 8 per cent from its recent low of 18,983, touched on April 19. In comparison, the benchmark S&P BSE Sensex gained 6 per cent over the same period, but is still nearly 4.5 per cent away from its all-time high of 52,517 that it hit on February 16.
'There is a weak link between the economy and the stock market.'
While the recent volatility in the secondary markets is a concern, experts believe the sentiment towards IPOs is still buoyant.
The country's dash to a $3-trillion market cap is more a case of teamwork, than a few members doing most of the heavy lifting. Sample this: The share of top 100 companies to India's total market cap (BSE-listed companies' m-cap) is 67.3 per cent currently, less than what it has been when the nation hit previous milestones, such as $1 trillion, $1.5 trillion in 2007 or $2.5 trillion more recently in December 2020. In 2007, when India's m-cap topped the $1-trillion mark for the first time, the top 100 companies accounted for three-fourths of the total m-cap; at $1.5 trillion, the share was almost 80 per cent.
'If one believes that the Indian stock market will go up 70 per cent every year for the next 10 years, I wish you good luck!'
In a bull-case scenario it sees the Sensex at 61,000 levels, while it's bear case scenario pegs the Sensex at 41,000 levels by December 2021.
Companies in the small-cap universe are having a dream run - the Nifty Smallcap 100 index has shot up more than 25 per cent on a year-to-date basis, even as the benchmark Nifty is up 7 per cent. This is the best start for the index since 2017 when the Nifty Smallcap 100 index surged 32.3 per cent between January 1 and May 10. However, in terms of outperformance to the Nifty, this year's performance is the best in more than a decade. A combination of sectoral tailwinds and lack of institutional selling pressure has helped small companies escape from the correction triggered by the second wave of Covid-19.
Markets
'In the short term, we may see some disruptions due to Covid, but in the medium-to-long term, we should keep an eye on US inflation and 10-year bond yields.'
Agriculture activity, according to recent channel checks by Prabhudas Lilladher, is expected to continue at a strong pace in FY22.
Over the next three - six months, UBS believes earnings will be the main driver for EM equities outperformance.
'Rising Covid cases and localised lockdowns are being closely monitored.'
However, a prolonged and intense second wave that curtails oxygen supply to industries for a longer-than-expected period will exacerbate downside risk in affected sectors
'If Covid peaks at around 250,000 cases, I don't see the market fall much. If it becomes uncontrollable and goes up to 600,000 a day, then the market may fall.'
The listing day gain-to-loss ratio for FY21 was 71 per cent, the highest since FY17, when it was 85 per cent.
If the current restrictions remain in place until the end of May, we estimate that the cumulative loss of activity could amount to around $10.5 billion, or around 0.34 percentage point (pp) of annual nominal gross domestic product, say Barclays economists.
Shares of small-cap companies have been on a roll with the S&P BSE Small-Cap index hitting a new high in intra-day deals on Thursday. The rally has been fueled by an up move in stocks of chemicals, cement, graphite electrode makers, pharmaceuticals and information technology (IT) shares. In the past two weeks, since March 25, the index has outperformed the market by gaining 7.3 per cent. In comparison, the S&P BSE Midcap index was up 6.1 per cent, while the S&P BSE Sensex gained 3.6 per cent during the same period.
'They can shift to dynamic asset allocation funds to automatically rebalance their equity exposure.'
However, despite Covid, Indian markets registered their best financial year performance in a decade, with the Sensex and Nifty50 rallying 68 per cent and 71 per cent, respectively, in FY21.
'Whenever markets rally, the IPO pricing gets aligned to the prevailing market conditions.'
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