The domestic equity market may be in pain deep down, but it still created opportunities for investors on Dalal Street to make some quick bucks since the Interim Budget on February 1.
As many as 32 stocks on National Stock Exchange (NSE) climbed between 50 per cent and 350 per cent in last 103 sessions since interim Finance Minister Piyush Goyal unveiled his Interim Budget.
Nifty advanced 1,116 points to 11,947 while Sensex rose 3,651 points to 39,908 during this period.
Only 35 per cent of stocks on NSE made money for investors, with Refex Industries being the best performer with a 368 per cent gain to trade at Rs 95.10 on July 4 against Rs 20.30 on January 31, 2019. It was followed by BIL Energy (up 268 per cent), OCL Iron and Steel (up 205 per cent) and Adhunik Industries (up 101 per cent).
The list included stocks from sectors like sugars, metals, IT, airlines, textile, water management, plastic products, real estate and insurance.
Shares like Magadh Sugar, Avadh Sugar, Adani Gas, Mandhana Industries, Tanla Solutions, Ion Exchange, Aavas Financiers, DCM Shriram, Electrotherm (India), Cantabil Retail, Triveni Engineering, Just Dial, Goldcrest Corporation, Goldiam International, Nova Iron, Reliance Nippon, Seamec and Mahamaya Steel Industries gained 60-100 per cent during this period.
Sugar prices are expected to remain stable or slightly higher at Rs 34-35 per kg in the coming months due to a surplus situation but analysts expect production to fall during 2019-20.
India will have a supply glut and closing stock of about 13 million tonnes of sugar for 2019-20, even if domestic consumption and exports are taken into account, said Care Ratings.
Vinod Nair, Head of Research, Geojit Financial Services said, “The market expects sectors related to agriculture, rural market, banks, infrastructure and water resources to be the focus areas in this year’s full Budget.”
Among others, stocks like Maithan Alloys, Indiabulls Real Estate, Asian Granito, SpiceJet, Matrimony.comNSE -0.93 % Zodiac Clothing, SRF, Emmbi Industries, Dilip Buildcon and MazdaNSE -0.57 % have rallied over 50 per cent since February.
The three leading Indian low-cost carriers (LCCs) – IndiGo, SpiceJet and GoAir – are each expected to report record profits in 2019-20, airline consultancy firm CAPA said in a June report. A large number of aircraft, which were taken back by Jet Airways’ lessors due to non-payment of dues, have now been leased out to SpiceJet.
“SpiceJet is strengthening and emerging as the clear number 2 airline in the market. Within 12 months, its domestic market share could approach 25 per cent, a size that accords its strategic importance in the sector,” said aviation lobby CAPA.
Among the big losers, stocks like Diligent Media, Reliance Communications, McLeod Russel, Reliance Power, Mercator, Petron Engineering Construction and Reliance Infrastructure have declined 80-90 per cent since the Interim Budget.
The benchmark equity indices ended slightly higher on Thursday as market participants preferred to sit on the sidelines ahead of the Union Budget.
“The Economic Survey, wherein the GDP growth was predicted at 7 per cent for FY20, failed to excite the market. Investors will react to the Union Budget and that could result in volatile moves across the board,” said Jayant Manglik, President – Retail Distribution, Religare Broking.
“Maintain extra caution in long trades and keep leveraged positions hedged. In the case of a decline, the 11,800 level would act as a strong cushion for Nifty,” he said.