Nifty heavyweights in vanguard of ongoing rally; 18 stocks surge 10-40% in 2019


Eighteen Nifty stocks surged over 10 percent in the first half of 2019 helping the index to climb Mount 12K. These are the stocks that are leading the rally even now as nine of them also hit their respective 52-week highs in June.

These nine stocks are Titan Company, Bajaj Finance, Bajaj Finserv, UPL, Axis Bank, TCS, Bharti Airtel, Wipro, and HDFC Bank. HDFC, another Nifty stock that hit 52-week high in June, is the only scrip that has returned less than 10 percent in the first six months of 2019.

Stocks that surged over 10 percent in the January-June period but did not hit their 52-week highs in June are State Bank of India, ICICI Bank, Kotak Mahindra Bank, UltraTech Cement, Infosys, Reliance Industries, HCL Technologies and Indian Oil Corporation.

Nifty returned a little over 8 percent in the H1CY19, which implies the above-mentioned stocks also outperformed the benchmark in the period.

Among Sensex stocks, Bajaj Finance, Axis Bank, TCS, Bharti Airtel and HDFC Bank returned in double digits.

Most of the heavyweight stocks have led the rally in benchmark indices, and any dip should be used as a buying opportunity as the long term story remains intact, suggest experts.

“Nifty continued to be resilient backed by selected names in the basket that helped the index to register new peaks. Most of these companies continued to report healthy quarterly earnings despite sector-specific concerns, and also remained away from issues such as corporate governance or misappropriation of funds,” Dinesh Rohira, CEO & Founder, told Moneycontrol.

“The gain in market share of a competitor due to sectoral headwinds coupled with strategic execution of business-model and strengthening financial position makes it sensible to hold these stock for long-term,” he said.

Rohira further added that the potential of earnings growth in the future given their strong presence across geography coupled with higher ability to take leverage make them long-term play. Any correction in the future should also be used as a buying opportunity to accumulate.

Three Nifty stocks hit 52-week low

As many as three Nifty stocks—JSW Steel, Indiabulls Housing Finance and Yes Bank—hit their respective 52-week lows in June. So, what should investors do?

Experts feel that most of the stocks that have hit their 52-week low at a time when benchmark indices are trading near record highs give an indication of structural problems and sector-specific headwinds.

Hence, investors should avoid fresh buying in these three stocks, experts say.

“Metal stocks like JSW Steel is part of global uncertainty, it will start to rally, once the trade war tension will cool off,” Parth Nyati, Co-founder and COO, TradingBells told Moneycontrol.

“Recent panic low of Rs 100 and Rs 500 in Yes Bank and Indiabulls Housing Finance, respectively, will act as critical support for the time being where we can expect some bit of recovery till they manage to hold these levels,” he said.

Way forward:

Most experts feel that the rally in benchmark indices is likely to continue but the upside remains limited. Sensex could see levels up to 43,500 while Nifty could touch 13,000 in the next six months, according to them.

“I think Sensex and Nifty may not go far ahead in the next six months. A market-friendly budget may trigger a rise that can take Nifty and Sensex above their recent highs but given the state of economy and uncertainties in global markets, it may not sustain at higher levels,” Romesh Tiwari, Head of Research, CapitalAim told Moneycontrol.

“I expect the Nifty and Sensex to pick up in the second quarter. Nifty may trade around 13,000 and Sensex can move above 43,500,” he said.

Rohira of expects Sensex to touch 41,500 by December 2019 while Nifty to hit 12,400 in the same period.

Nyati of TradingBells is of the view that if global uncertainties subside then we can expect 13,000 in Nifty and 43,000 in Sensex by December 2019.

This is the fifth instalment of the six-part half-yearly review series. You can read the first, second, third and fourth part here.