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News

Nifty Defies Covid-19, Records Best H1 In Decade

Author: Finapolis Network/Wednesday, October 7, 2020/Categories: Stocks

Nifty Defies Covid-19, Records Best H1 In Decade

Benchmark delivers 31% returns, while 59% of BSE-200 constituents declined

Mumbai: After the coronavirus began to disrupt the global economy from March onwards, April-September period, the first half of 2020-21 financial year has turned out to be the best first half for NSE Nifty in the last decade, aided by low base post the correction in March, according to a report from Motilal Oswal Institutional Equities as the market rally was more broad-based as the NSE’s broad-based index has given best 6-month return since October 2009.

The 12 month price performance differential between the Nifty 50 v/s the Nifty’s Equal weight index indicates that the market rally has been more broad-based over the past six months. 1HFY21 has turned out to be the best H1 for the Nifty in a decade with the Nifty delivering 31 per cent returns, the report said. The broad-basing of markets after almost three years of polarization augurs well as the recovery in underlying economy takes shape, it added. Mid and Small-Cap indices have once again outperformed Nifty in September. In the BSE-200, BFSI dominates list of laggards in calendar year 2020 year to date. The 53 per cent of BSE-200 companies yielded negative returns in September, while in year to date (YTD), 59 per cent of BSE-200 constituents declined and financials were the major laggards.

In the BSE-200 index, 21 stocks up more than 10 per cent in September, 63 stocks up more than 10 per cent year to date. 94 out of BSE-200 constituents gained in September with 21 stocks posting more than 10 per cent gains. In the year, 82 BSE-200 constituents gave positive returns with 34 stocks returning more than 30 per cent, 20 of these 34 stocks are either tech or pharma.

In the Nifty, year to date top three performers are pharma majors. In CY20 YTD, 20 Nifty stocks have delivered positive returns with Reddy's and Divi's gaining 80 per cent and 65 per cent, respectively. The report says 22 per cent of Small-cap companies have doubled since March lows. 11 per cent of Large-cap companies and 14 per cent of Mid-cap companies have more than doubled since March.

Covid has resulted in Bank Nifty's relative outperformance versus Nifty to collapse. Bank Nifty had outperformed the Nifty over March 2016 to December 2019. However, the entire outperformance has been wiped out over the last six months as the BFSI segment is facing the maximum brunt of the Covid-19 pandemic. The Nifty-50’s market cap is at an all-time high now. However, the Nifty Mid-cap 100's market cap is still down 24 per cent from its peak, although it is above December 2019 level.

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The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

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