The sharp correction in the Indian markets from their peak levels has made valuations attractive, say analysts, who advise buying selectively, but only from a long-term perspective. Fifty-six of the Nifty 100 stocks, according to Mahesh Nandurkar, managing director at Jefferies, now trade below the 10-year historical averages, including stocks in financial, select auto, and pharma sectors. "Valuation (one-year forward consensus price-to-earnings, PE) has declined 25 per cent from October 2021 peak, almost matching the 33 per cent price-earnings contraction during the 2011 tightening cycle when repo rates went up by 375 basis points (bps) versus 250 bps this cycle.
Chinese alumina refining and metal smelting technologies have emerged as a match for the best anywhere in the world. In fact, Vedanta and Hindalco have bought technologies from China. Our aluminium makers will be haunted by twin fears of rising imports and low metal prices squeezing margins over a long time.
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Net profit grew 25.4% in Q4 but revenue growth, lower at 8.5%, suggests lack of volume expansion.
Cascading effect of rising raw materials will result in inflation, high rates, slow capex
So which sectors are likely to do well in 2022? Should you focus on domestic economy-related sectors or export-oriented ones?
The earnings are, however, expected to be down around 2 per cent on a sequential basis due to pent-up demand getting exhausted and the adverse impact of rising metals and energy prices on consumer goods and manufacturing companies.
Mid- and small-cap indices have outperformed the frontline benchmarks - the S&P BSE Sensex (up around 10 per cent) and the Nifty50 (13 per cent) - in the first half of calendar year 2021 (H1-CY21) by rallying 26 per cent and 39 per cent, respectively. The trend, analysts believe, is likely to continue in H2-CY21 as well. The outperformance in H1-CY21 comes on the back of improved earnings and strong inflows from the foreign portfolio investors (FPIs) in Indian equities. However, good monsoon so far, gradual opening up of the economy and the pick-up in the pace of vaccination provides support to the market.
'The recent correction in indices has made the markets cheaper to invest for the long term.'
However, experts caution that investors should not expect the big returns they got from the sector between March and September 2020.
'There will be a series of rate hikes, but the pace and quantum will depend on how the economy in the US and the rest of the world behave.'
Reliance Industries on Friday reported a 41.5 per cent jump in its third quarter net profit as oil, retail and telecom businesses fired on all cylinders. Net profit of Rs 18,549 crore in October-December compared with Rs 13,101 crore a year back, the company said in a stock exchange filing. Income from operations rose to Rs 1.91 lakh crore from Rs 1.28 lakh crore.
Economists caution that the underlying cause could be an alarming drop in demand -- something that's not good for economic growth.
Automobile dealers' body FADA on Tuesday expressed concern that the chip shortage issue could derail passenger vehicle (PV) retail sales during the festive season, as automakers are struggling with an adequate supply of vehicles to dealers due to production challenges. Terming semiconductor shortage as a "full-blown crisis", the industry body warned of a lacklustre festive season, especially for the passenger vehicle dealer fraternity, with low inventory levels and non-availability of the fast-moving model variants ahead of the peak festive period.
'It really doesn't matter that investors getting allotments sell their IPO stock holdings on listing day because a new set of investors are entering.' 'This explains the continued rise in stock prices even after the first day of listing.'
As our planet depletes natural resources at a frantic pace, one brand of alchemy that will become critical to humanity's survival is technology that turns sea water into drinking water.
Many offer personalised ornaments with 3D printed images and engraved names to lure customers in a scenario of high gold prices.
The NSE Nifty finally ended at 4,180, down 18 points.
'There is a weak link between the economy and the stock market.'
'Rising Covid cases and localised lockdowns are being closely monitored.'
Stretched valuations and slowdown in DII flows are some of the reasons why Goldman Sachs cut its India rating to 'market-weight'
'The economy needs to deliver the expected 7.5% growth for the markets to deliver better than single digit returns.' 'Any disappointment in growth can see the markets correcting downwards.'
Stock market minnows put up a stellar show in 2021 giving returns of up to 60 per cent amid Dalal Street dream run and are likely to continue sailing northwards in the New Year too. Trumping pandemic-induced uncertainties, the Indian equity market posted stunning gains this year achieving several feats and smaller stocks benefited the most from the strong momentum. From reaching the momentous 50,000-mark in January to scaling 61,000-level in October, the BSE Sensex had an epic journey this year.
Stick to export-focussed plays, large-caps, say analysts
India will see a gradual growth acceleration with its GDP expected to reach 5.9 per cent this year.
Investors must be cautious and follow a prudent diversification strategy to mitigate against any risks in case of any unforeseen events.
Markets climb higher tracking global cues.
The broader NSE Nifty, after shuttling between 10,651.60 and 10.532.70 points on alternate bouts of buying and selling, closed 6.20 points, or 0.06 per cent, down at 10,576.30.
The breakdown of talks between Greece and its international creditors raised fears of Greece's exit from the euro zone.
But it is likely that campaign spending resulted in some positive activity through this period.
There isn't much Budget could do directly to help sectors.
From January-March this year, 64,000 jobs were created in eight crucial sectors of the economy.
The company aims to make Lanjigarh refinery the first zero-based refinery in the world.
BSE Bankex, Healthcare, Capital Goods and Consumer Durables ended higher.
Macro economic environment in India is expected to improve further and drive the BSE index, Sensex, to 33,500 by December-end.
Metals bucked the trend and shone across the board.
In UK, France and Germany, the president and CEO of Edelweiss Securities, anticipates votes incrementally in favour of local protection and de-globalisation.
The market players are expected to react to the better than expected factory output data for the month of August, which revealed that the industrial production grew by 6.4%.
Experts tell Ujjval Jauhari that investors need to be careful in picking stocks given high valuations and with markets possibly ignoring potential risks
Earnings growth is unlikely to see much recovery and sales revenues are also likely to remain muted
