The traditional Hindu accounting year, a very eventful one from the economy and market’s point of view, is ending with really nothing to write home about.
BSE Midcap and Smallcap indices ended the Samvat year in losses for a second year a row, which is a rarity. An 11 per cent rise for the BSE Sensex may look reasonable, but those gains were powered by few, select index stocks.
To put it in perspective, top 10 Sensex performers added Rs 9.06 lakh crore during the ongoing Samvat. This is against 2,455 other stocks on the domestic bourses that lost Rs 1.83 lakh crore in market value during the same period.
Only 12 of the 30 Sensex stocks are ending the Samvat year with over 10 per cent return. For the Samvat year, Sensex is up 10.82 per cent, which is better than previous Samvat year’s 8.79 per cent return. In last 10 years, it will be only the fourth time that the index would be ending a Samvat year with double-digit returns.
The BSE Midcap index is down 4.78 per cent for the Samvat year against a 7.65 per cent drop in last Samvat. The index delivered double-digit returns in four previous Samvat years.
Same was the case with BSE Smallcap index, which declined 11.47 per cent this Samvat compared with a 14.6 per cent slide in the previous year. Not once did these two indices fall in two consecutive years, 10-year data revealed.
“Samvat 2075 was one of the most divergent years in terms of performance differential between the indices. Even the performance of the largecap index was concentrated, with top 10 index performers accounting for most of the gains,” said Aditya Birla Money.
The Samvat year saw the Modi-led NDA government retain power with a stronger mandate. Earnings played catch-up with valuations, monsoon was delayed a bit but was plentiful by the end of the season.
Some market-unfriendly proposals such as a tax surcharge on the super-rich that hit a section of the FPIs, mega bank mergers and a major corporate tax caused a lot of ups and downs on the bourses.
“The recent corporate tax reduction would position India competitively against its South Asian peers, offering an alternative to the companies that are looking to shift their production bases from China,” said Axis Securities.
Analysts in an ETMarkets.com poll suggested that midcap and smallcap underperformers of Samvat 2076 should stage a smart comeback to script promising stories in the new Samvat year.
50 stock picks from top brokerages for Samvat 2076
Samvat 2075 comes to an end, and a new Samvat kicks off on Diwali this Sunday, October 27. In the Samvat year gone by, Nifty generated 10.8% return and Sensex 9.8%, but that growth was limited to a handful of stocks. This is why most investors’ equity portfolio bled to make Samvat 2075 a forgettable year. Samvat 2075 was tough for investors, as stock performance remained concentrated in specific pockets.
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