Indian benchmark indices have so far in 2023 benefited from a number of favourable factors, including a sharp fall in the crude oil prices, resumed foreign portfolio investor (FPI) buying, stable Q4FY23 earnings, and a potential halt by the US Fed in raising interest rates.
The Nifty 50 hit its 2023 high on Thursday, May 4 and gained 165.95 points to touch 18,255.80. With the exception of May 3, when it finished lower by 0.32%, the benchmark indices have been moving upward for last seven trading sessions since April 24.
“Post a spectacular run by the benchmark in the April month, the merry run continues as Nifty marked a fresh high for the calendar year on Thursday at 1,8267. As per the 2022 closing, we are not seeing any significant change as Nifty is just up by 0.22% but after the first quarter of weakness, expect the going ahead period for 2023 to be strong,” said Rajesh Bhosale – Equity Technical and Derivative Analyst, Angel One.
The benchmark indices saw their biggest monthly gain in 2023 in April, which showed a significant improvement in performance. The real estate, banking, and auto sectors all experienced significant rallies at this time, and there was also a steady inflow of FPIs and a drop in the price of crude oil. Only 3 equities in the Nifty 50 index reported losses in April, while 46 stocks showed gains.
The lower valuation of Nifty 50 (16.6X CY2024 P/E) coupled with the easing inflation rate and peaking of the interest rate cycle along with a decline in commodity prices bodes well for the Indian market. This scenario could be a direct boost to core sectors of the economy, especially infrastructure, capital goods, energy, construction, etc, believes Vinit Bolinjkar, Head of Research, Ventura Securities.
The Nifty 50 index has factored in these positive sentiments and has shown impressive performance throughout 2023. This positive trend could continue throughout the year, further bolstering the market’s growth and development.
FPIs continued to buy Indian shares in May and invested ₹10,850 crore in the past four trading sessions.
According to data available with the depositories, this followed a net investment of ₹11,630 crore in stocks in April and ₹7,936 crore in March.
Due to sluggish demand, as indicated by the Energy Information Administration (EIA), crude oil prices fell last week. The price of Brent oil futures on the Intercontinental Exchange (ICE) dropped 6.5% to $75.1 a barrel as the week came to a close. The May contract for MCX crude oil also decreased 7.1% for the week, closing at $5,841 a barrel on Friday.
According to Avinash Gorakshakar, Head-Research, Profitmart Securities, sectors like banking which have a high weightage in the Nifty are the key reasons for out performance in the index. Banking stocks continue to be are attractive and are being accumulated by funds FIIs which are also witnessing healthy flows in the market.
More importantly, dollar index is expected to correct sharply, which could increase overseas fund flows ahead. But in an index level now the market will consolidate as the rise in index has been very fast in a short time frame. So focus will be on mid and small caps where valuation comfort is good.
Eight Nifty stocks rally over 10% so far in 2023
Investors have received good returns from Nifty 50 stocks during this period (until Friday, May 5).
ITC Ltd emerged as the top performer throughout this period with a surge of 29.32%.
ITC’s market-capitalisation was ₹5.11 lakh crore in the final week of April, while Infosys was valued at ₹5.08 lakh crore. ITC achieved this after seeing a 59% increase in its share over the past year.
GQG Partners Emerging Markets Equity Fund increased its holding in ITC from 1.29 percent in Q3 FY23 to 1.44 percent for the three months ending March 2023. According to information available with the BSE, it gradually increased its interest from 1.10 percent in June 2022 to 1.15 percent in September 2022.
After announcing the purchase of a 39% stake in Sproutlife Foods Private Limited (SFPL), the business that owns Yoga Bar, FMCG major ITC Ltd gained by over 2% in intraday trade on Friday to reach a new 52-week high.
The second in the list was Pune-based two- and three-wheeler maker Bajaj Auto that jumped 23.42%.
Compared to April of the previous year, total sales for Bajaj Auto Ltd. increased by 7% to 3,31,278 units on Tuesday.
According to a regulatory statement by Bajaj Auto, the business reported total sales of 3,10,774 units in April 2022.
For the quarter ended March 31, 2023, Bajaj Auto,exceeded street expectations despite a one-digit decline in PAT due to reduced sales. The auto giant reported a net profit of ₹1,433 crore in Q4FY23 compared to ₹1,469 crore in the same quarter last year, a decrease of 2.5% in the single digits.
Tata Motors, which has increased by 22.98% so far in 2023, came in third on the list.
Group global wholesales increased by 8% for the company between January and March (Q4FY23).
The global wholesales for the Tata Motors Group, which includes Jaguar Land Rover (JLR), in Q4 FY23 were 3,61,361 nos., up 8% from Q4 FY22, according to an exchange filing.
In the fourth quarter of FY23, global wholesales of all Tata Motors commercial vehicles, including the Tata Daewoo brand, were 1,18,321 nos, a 3% decrease from the fourth quarter of FY22.
Tata Motors’ global wholesales in Q4 FY23 were 1,35,654 no, up 10% from Q4 FY22.
The company in an exchange filing said that the global wholesales for Jaguar Land Rover were 1,07,386 vehicles. Jaguar wholesales for the quarter were 15,499 vehicles, while Land Rover wholesales for the quarter were 91,887 vehicles.
Dr. Reddy’s Labs, Larsen, Power Grid Corp, Nestle, and BPCL were the other stocks on the list that had returned between 10% and 17% to investors.
Also Read: FII flows, Inflation, IIP data, Q4 results among major key factors to dictate markets in week ahead
On Friday, the Nifty 50 ended 1.02% lower at 18,069 points.
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