The Indian stock market was extremely bullish which was showcased by the significant rally of Nifty 50 Index, some stocks almost doubled when Nifty reached an All-time high of 11,000. Market experts believe that rally was due to sustained liquidity from both domestic investors and Foreign Institutional Investors. Overseas investors and domestic funds have poured more than $26 billion into the stock market last year and they have invested more than $1.5 billion so far in 2018 alone. Another reason behind the surge was better than expected quarterly earnings of top companies in Nifty 50 index. The BSE Sensex also surged to reach the 36,000 mark for the first time.
The Nifty Index which touched 10000 mark on July 25th 2017 took almost 6 months to reach the next milestone of 11,000 which was considered a psychological resistance benchmark by Dalal street Investors. More than 10% of stocks in the broad Nifty500 Index surged around 50% during this period with some Midcap and Smallcap stocks soaring upto 200%. Some Stocks which belong to Nifty 50 Index such as Maruti Suzuki, Gail, ONGC and Tata Steel increased by more than 20% during the initial 6 months period.
Smallcap and Midcap Stocks in Spotlight
I have already pointed why small cap and mid cap stocks might have lacklustre performance this year in my previous article. Coincidentally one of the Small cap stocks which witnessed maximum gain during this period were Cement manufacturing company Rain Industries – soared 240% from its market price of Rs. 127.20 to Rs. 431.90 in Jan 2018. Incorporated in 1986; they are one among the leading cement manufacturers in South India with an annual output of 3.12 million tonnes.
Another midcap stock which witnessed massive gains of 201% during this Bull Run was Radico Khaitan, formerly known as Rampur Distillery & Chemical Company Ltd. Share Prices rallied from Rs. 129.40 in July to an All-time high of Rs. 389.60 in Jan 2018. The liquor company reported their Q3 earnings on Jan 24th 2018 and posted a Q3 net profit of Rs. 35.01 crore which is 77.71% higher than previous fiscal quarters.
Stocks that doubled within few months
Shares of the flagship Textile Company Bombay Dyeing rose more than 110% from Rs. 85.90 to Rs. 295.50. Other important stocks which doubled during this period are:
1.India’s leading Jewellery brand – PC Jeweller Ltd which rose 131%
2.Chemicals manufacturer – Gujarat Alkalies that soared 126%
3.Pune-based Real estate developers Kolte Patil which went up by 122%.
4.Manufacturing company JaiCorp which went up by 121%
5.Technology services provider Vakrangee went up by 116%
6.Real-estate, gaming and hospitality company Delta Corp shares went up by 108%
7.Luggage maker VIP Industries shares rose by 106%
8.Home Appliances maker IFB Industries stock prices surged by more than 100%
Will the Bullish Sentiment continues further?
All the above stocks gave decent returns to investors during last year because of the tremendous Bull Run, but does the same type of Bull Run continues further? Well that depends more on Economic growth and upcoming Government policies. In the previous year, various economic reforms made by the Indian government such as GST implementation, bank recapitalization and big projects like Bharatmala has created a strong bullish sentiment among investors.
But this time Market participants need more evidence and assurance that economy is indeed doing well and Government is staying in track with its objective. So Market direction depends more on Economic growth, Government Measurements and Fiscal Policies. Traders and Investors should understand and track the Market sentiment before taking decisions.
