The News International Team
Equity benchmarks staged spectacular performance in the year gone by (2014), rallying more than 31 percent (on Nifty and 6000 points on Sensex), the best annual performance in last five years, aided by Narendra Modi government’s ‘majority’ win in Lok Sabha elections, sharp fall in inflation and crude oil prices, and hopes of reforms and rate cut by RBI. In fact, the Indian markets outperformed Asian and global peers during the year.
Foreign institutional investors were the key players behind this rally, buying more than Rs 97,000 crore worth of equity shares in 2014, the biggest net purchase in the last four years.
Experts believe the rally may continue in 2015 as well, but not as big as 2014. They advise buying quality stocks on every decline as market may continue to see new highs in the year ahead. (Also read – See 50 bps rate cut, good equity returns in ’15: HSBC India )
“Our market remains the hot investment option. And this growth is expected to continue as cyclical, rate-sensitive and investment-oriented stocks find flavour with investors,” says Kamlesh Rao, CEO, Kotak Securities.
“India is the only major country that is projected to see a pick up in growth momentum. The growth cycle moved from slowdown to a recovery mode – last seen in 2009. And the industrial sector is expected to lead this recovery. This may start out gradually, but growth will pick up speed in the coming years,” he explains.
The dramatic fall in global crude oil prices was the game changer for India in last quarter of 2014 as the country imports 70 percent of the oil requirement. Brent crude touched five-and-half-year low, falling to USD 57 a barrel currently from USD 115 a barrel in June while the gold was at four-and-half-year low of around USD 1200 an ounce.
Retail inflation moderated to 5-6 percent from double digits last year. Rao says the market expects the economic growth to be higher at 6.5-7 percent over the next 3-5 years.
The 30-share BSE Sensex and 50-share NSE Nifty hit record high of 28822.37 and 8,626.95, respectively in 2014 while the broader markets outperformed benchmark indices. The CNX Midcap rallied 55 percent and BSE Smallcap surged 68 percent during the year.
Financial, consumer durables, auto, capital goods and pharma were the best performers with the Bank Nifty, Consumer Durables, Auto, Capital Goods and Healthcare indices rising 47-65 percent.
Axis Bank was the top gainer during the year, up 94 percent followed by IndusInd Bank, BPCL, Maruti Suzuki, SBI, PNB and Kotak Mahindra Bank with 70-90 percent gains. However, Cairn India slipped 26 percent on fall in crude oil prices and JSPL tanked 42 percent on cancellation of coal blocks.
In the midcap space, JBM Auto shot up 999 percent and Shreyas Shipping gained 990 percent. Patel Integrated, Century Plyboard, PTC India Financial and Gati climbed 511-623 percent.
Last day of 2014
The Sensex on Wednesday advanced 95.88 points to close at 27499.42 and the Nifty rose 34.45 points to 8282.70 while the BSE Midcap and Smallcap indices were up 1 percent each.
Dr Reddy’s Labs and BHEL gained 2-2.7 percent followed by Reliance Industries, TCS, NTPC, ICICI Bank, SBI, Axis Bank and Sun Pharma with 0.6-1.7 percent.
Telecom stocks were in focus after the Telecom Regulatory Authority of India released recommendations on reserve price (3G spectrum) and valuation for 2100 megahertz. Reserve price pan-India kept at Rs 2,720. Analysts say overall, reserve price is on the higher side and only serious players are expected to bid. Bharti Airtel gained nearly a percent.
Select auto stocks were sluggish reacting to the likelihood of the government withdrawing excise duty concessions to the auto industry from January 1, 2015. Maruti does not expect long term negative impact on car demand. Mahindra & Mahindra fell 1.9 percent. Maruti and Bajaj Auto declined over 0.6 percent while Tata Motors and Hero Motocorp rebounded in afternoon trade, up around half a percent at close.
In the broader space, DB Realty was up 20 percent as the Mumbai-based real estate company is soon getting approval for its Mahalaxmi project from Municipal Corporation Of Greater Mumbai.
Suzlon Energy rose 7.5 percent as sources told CNBC-TV18 that the turbine maker will sign MoU with Gujarat government for 450 mw offshore wind farm.
About 1696 shares advanced while 1175 shares declined on the Bombay Stock Exchange.
Meanwhile, India’s fiscal deficit was Rs 5.25 trillion (USD 83.08 billion) during April-November 2014, or 98.9 percent of the full-year (FY15) target. The deficit was 93.9 percent during the same period a year ago.
On the global front, Shanghai was the top gainer, up 2.2 percent amid thin trade despite data showing slight contraction in manufacturing activity. European markets were trading marginally higher at the time of closing of Indian indices.