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Sensex jumps 50% from last Dussehra to scale 61,000 mark. 169 stocks give multibagger returns

The rally was backed by hopes of rapid economic recovery and improved corporate earnings, along with low interest rates, easy liquidity and government measures to boost growth after the pandemic.

India’s equity markets have generated huge wealth for investors since Dussehra last year as the benchmark indices scaled new highs, even though there was a pause in April-May due to the second Covid-19 wave.

The BSE Sensex has rallied more than 50 percent since last Dussehra on October 25, 2020, to surpass the 61,000 milestone on October 14, a day before Dussehra celebrations across the country this year.

The rally was boosted by hopes of a rapid economic recovery and corporate earnings in line with expectations or better. In addition, there was support from low interest rates, easy liquidity and measures by the government and the Reserve Bank of India to boost economic growth that had been hit by the pandemic.

“India’s growth and economic parameters continue to remain strong, keeping aside temporary situations,” said Mohit Nigam, head – PMS, at Hem Securities. “The Make in India initiative, China+1 strategy, the government’s aggressive approach towards growth and development, production-linked incentives, foreign investment, rapid vaccination drives, lifting of travel restrictions and easing of curbs over various industries are some of the major reasons that have helped to lift the market’s momentum this year and shall continue to play a key role in driving it in the upcoming quarters.”

The RBI continued with its accommodative stance and kept the key policy rate unchanged to support liquidity. The International Monetary Fund reaffirmed its estimate of India’s growth at 9.5 percent for FY22 even while dropping its global economic growth estimate by 10 bps to 5.9 percent for the same period.

Metals, realty

All sectors participated in the stock market run-up since last Dussehra, with metals the prominent gainer, rallying 148 percent. Among the others were realty (up 137 percent) and power (108 percent). The auto, bank, capital goods, FMCG, healthcare, IT, and oil & gas sectors gained 35-90 percent.

The outperformance by the broader markets continued, with the BSE Midcap and Smallcap indices surging 78 percent and 97 percent, respectively.

There were 169 multibaggers created during this time and 279 stocks registered double-digit gains, whereas only 32 stocks closed in negative terrain.

The multibaggers included Adani Total Gas, JSW Energy, Adani Transmission, Balaji Amines, Adani Enterprises, Trident, HFCL, Happiest Minds Technologies, Tata Motors - DVR, Gujarat Fluorochemicals, IRCTC, Indian Energy Exchange, Tata Power Company, and Deepak Nitrite – all shares that surged 300-637 percent.

Stocks that gained 100-282 percent in the same period include: Hindustan Copper, Tata Elxsi, Persistent Systems, NALCO, HEG, Tata Chemicals, Mindtree, Tata Steel, Indiabulls Real Estate, Adani Power, Bajaj Finserv, Vedanta, Polycab India, Century Plyboards, Hindalco Industries, APL Apollo Tubes, Dixon Technologies, Sobha, L&T Technology Services, Route Mobile, Cyient, JK Paper, Oil India, BHEL, DLF, Avenue Supermarts, Bajaj Electricals, Radico Khaitan, State Bank of India, Godrej Properties, Bajaj Finance, ONGC, Indian Hotels, Motherson Sumi Systems, Adani Ports, Gujarat Gas, JSPL, JK Lakshmi Cement, Affle India, Schaeffler India, Wipro, Titan Company, Havells India, and Varun Beverages.

Foreign investors bought a net Rs 1.9 lakh crore worth of shares since last Dussehra, though there has been some volatility ahead of the US Federal Reserve tapering of bond purchases, which could start in November. Domestic institutional investors were net sellers in the same period, offloading shares worth almost Rs 60,000 crore.

Retail investors

The participation of retail investors in the equity market increased significantly. Going by data on systematic investment plans, the monthly flow has never fallen below Rs 7,000 crore since May 2018, and in September, the flow crossed Rs 10,000 crore for the first time at Rs 10,351 crore.

Experts expect retail investments to remain strong, at least in the near term, given the expected economic and earnings growth.
“Retail investors have been increasing their allocation to equities due to limited opportunity in other asset classes, especially fixed-income instruments including bank term deposits,” said Gaurav Dua, head of capital market strategy at Sharekhan by BNP Paribas. “And rightly, a large part of retail inflows are coming into the market through SIPs, given the apprehension of a correction post the unrelenting rally in equities. We expect SIP flows to remain strong in the near term.”

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