Public CompanyMarkets put up their best show ever
Only Sri Lanka, Indonesia and Brazil better Sensex returns.
- 2009: Markets sizzle - Get ready for IPOs on bourses, more ETFs - Religare Enterprises to raise Rs 1,850 cr via rights - Pramod Jain threatens to move court against Golden Tobacco EGM - New circuit breaker norms from Jan 4 - Dalal Street to take New Year break
The Indian stock markets clocked their best-ever annual performance in 2009. The benchmark Bombay Stock Exchange Sensitive Index, or the BSE Sensex, logged an 81.03 per cent rise, the fourth best globally. Only Sri Lanka (125 per cent), Indonesia’s Jakarta Composite (87 per cent) and Brazil’s Bovespa (82 per cent) fared better. The Sensex just managed to pip the Shanghai Composite Index, which rose 80 per cent. For the Sensex, which rose 7,817 points to close at 17,465, the previous high in terms of returns was in 2003 (see graphic).
The National Stock Exchange’s Nifty also had a record year. It rose 75.76 per cent, or 2,242 points, to close at 5,201.
On the last day of the year, the markets closed at their highest in nearly 20 months. The surge, which began in March, marked a turnaround from a record fall of 52 per cent in 2008.
The rise was driven by portfolio inflows, estimated at $17.46 billion during 2009, just $320 million short of the 2007 record of $17.78 billion.
“Recovery in the markets in 2009 was not surprising considering that benchmark indices had crashed over 80 per cent from their all-time highs. Unparalleled money supply has been the key driver,” said Ajay Pandey, assistant vice-president at Intime Spectrum Securities.
The sentiments of foreign institutional investors were buoyed after the election verdict in May. Even deficient rains did not deter investors searching for higher yields in a world where liquidity was not an issue.
SNAPSHOT 2009
Top 5 A Group Gainers
Dec 31, ‘08
Dec 31, ‘09
% Chg
Oracle Financial
458.30
2317.50
405.67
Tata Motors
159.05
792.60
398.33
Sesa Goa
85.70
410.65
379.17
Jindal Steel & Power
151.98
703.95
363.19
MphasiS
156.35
723.90
363.00
Top 5 A Group Losers
Sterling Biotech
154.94
95.15
-38.59
Tata Communications
500.85
336.05
-32.90
Koutons Retail
508.25
345.15
-32.09
Rei Agro
68.94
48.65
-29.43
Reliance Comm
227.25
172.90
-23.92
BSE sectoral performance
Metal
5214.35
17399.22
233.68
Auto
2444.71
7435.83
204.16
IT Sector
2227.96
5186.35
132.78
Cap Goods
6911.12
14116.69
104.26
Cons Durable
1913.74
3785.39
97.80
Bankex
5454.54
10030.80
83.90
PSU
5279.61
9531.73
80.54
BSE Power
1829.31
3188.55
74.30
Oil & Gas
6050.04
10470.97
73.07
BSE Realty
2274.13
3855.78
69.55
Healthcare
2966.19
5018.33
69.18
TECk
1947.04
3277.04
68.31
FMCG
1987.38
2791.55
40.46
Yearly Sensex Performance
(At the end of Year)
Sensex
YoY % Chg
PE
PBV
2000
3972.12
-20.65
20.28
2.89
2001
3262.33
-17.87
15.73
2.22
2002
3377.28
3.52
14.64
2.28
2003
5838.96
72.89
18.86
3.55
2004
6602.69
13.08
17.07
3.77
2005
9397.93
42.33
18.61
4.52
2006
13786.91
46.70
22.76
5.21
2007
20286.99
47.15
27.67
6.71
2008
9647.31
-52.45
12.36
2.58
2009
17464.81
81.03
22.36
4.20
Metals, auto lead gains
While the rally was all-round, metals and auto led the gains on the sectoral front. The metal index more than trebled. Auto stocks led the gainers in the main index, with shares in top vehicle maker Tata Motors rising five times over the year and reaching their highest since October 2007.
The BSE FMCG (fast moving consumer goods) Index turned out to be the worst performer, clocking a 40.46 per cent rise.
Rally to continue
Market players said the rally was expected to continue in 2010, underpinned by strong economic growth and an improving earnings outlook, but was unlikely to repeat the performance of 2009. The only worry was withdrawal of stimulus measures globally. But with India expected to outperform most markets, inflows are expected to continue.
“Today, India is the preferred destination for equity investors across the world. Dropping of VIX from 80 a year ago to 20 now is indicative of growing confidence in the markets and thus strong inflows can be expected to continue,” said ICICI Securities Managing Director & CEO Madhabi Puri Buch.
Angel Broking Chairman and Managing Director Dinesh Thakkar said: “In 2010, the markets will build on the gains put up in 2009. The acceleration in economic activity will hasten earnings growth for India Inc, supporting the up move. Further, strong inflows are unlikely to stop due to strong fundamentals and earnings by India Inc, supported by reasonable valuations.”
Thakkar said banking and infrastructure were the two sectors that would perform well. “For the next year, the theme will be commodity-linked, consumer demand-driven stocks. Also, shares of real estate companies will be worth watching given the kind of money supply that is expected,” said Pandey.