Bumper returns in FY20-21, know how the market will move in the new year
The financial year for the Indian stock market is ending with a 2021 positive note. This year, all sectoral indices including the Sensex and Nifty have closed in the green mark. The Nifty has shown a 73 per cent jump in FY 2021. At the same time, the Sensex has seen a growth of 70 percent. However, this year, the market and economy were overshadowed by the threat of Kovid-19.
In FY 2021, the metal, auto and IT sectors have been at the front seat in terms of gain. On the other hand, the performance of FMCG, PSU banks, pharma sector has been weak compared to Nifty.
Where the Nifty saw a 73 per cent growth in FY 2021. At the same time, Nifty FMCG has gained 27 per cent, PSU bank 61 per cent and Nifty Pharma 70 per cent and Nifty financial services index has increased by 72 per cent.
PSU bank stocks (PSBs) have not been doing well since the beginning of 2020. These have seen a major correction in the later part of the year.
Vishal Balabhadruni of CapitalVia Global Research says FY 2020 started with a negative note for PSBs. Shares of this segment saw some gains due to the rate cut by the RBI. But due to the corona, the entire mood was disturbed by the applicable loan moratorium. Along with this, the growing concern about NPAs has created a lot of leprosy for the sector.
The pharma sector performed well in the first half of FY 2021. But further Momentum could not sustain due to fewer cases of acute diseases, OPDs and elective surgeries. There will be ups and downs in this sector even further.
Vishal Balabhadruni further said that due to the COVID-19 out break, the FMCG sector saw a real reshuffle. Due to this epidemic, words like health and immunity came on the tongue of common people and became the word. To meet the demand and choice of consumers, companies in this sector had to adopt new ideas and methods.
How will the market move in the future
Market experts say that during the new year, PSU banks can see growth with mixed trends. The government’s decision to privatize two banks and recapitalize PSBs will have a good impact on the sector.
Vishal Balabhadruni says that the government’s decision not to privatize SBI, PNB, Union Bank, Canara Bank, Bank of Baroda, Indian bank has been positive for the sector. The impact of the RBI’s concern of the heavy pressure on this sector has started to show, and the possible weakness in the asset asset of banks indicates that the path will not be easy for the sector even in the new year.
Talking on the pharma sector, he said that due to the increased focus of the government on Healthcare in Budget 2021, this sector has got huge opportunities. Production in the sector has come to around 90 per cent of Kovid’s earlier levels. It is now expected that the margins of this sector may once again come down to the pre-COVID level.
For the FMCG sector, new opportunities are now seen in small cities, towns and villages, as the choice of people living in these areas is changing with increasing prosperity.
Vishal Balabhadruni says that Kovid’s vaccine has now become a reality. Many products have resumed production. Kovid 19 has made consumers very aware. Companies now have to give importance to words like immunity and healthy in their products. The new year is expected to be good for this segment.
Deepak Jasani of HDFC Securities says that with the control of Kovid and softening in commodity prices, we may see a strong boom in the FMCG sector. At the same time, the move of PSU bank shares will depend on the progress on the privatization front and the position of the NPA.
Experts say that the shares of financial services and manufacturing sector are looking more attractive for the new year compared to the defensive sector like FMCG along with V Sheep’s review in the economy.
Nitin Shahi of FINDOC says to avoid PSU banks. If you are making a profit then leave it after collecting the profits. There is only one share of this sector whose future looks good. That share is SBI. Nitin Shahi has investment advice on any downfall in SBI.
Apart from this, Nitin Shahi is also advised to place bets on the decline in the forma and FMCG sector. Because these are the sectors that provide defensive cover to your portfolios. If the condition of the Kovid worsens, then in that case they will perform out of the sector.
Nitin Shahi recommends investing in blue chip stocks like Sun Pharma, Cipla, Dr Reddys Labs in this sector from a 2-year perspective. Shahi says that if you look at the FMCG space, shares like HUL and ITC are looking very good at the current level. Next we will get to see the demerger of ITC, after which there will be a re-rating of this stock. Shahi also likes Marico, Dabur and Godrej Consumer of this sector.
