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    Sensex sees worst start to the year in 4 years, but some stocks deliver big

    Synopsis

    This comes on the back of a relatively good 2019, during which Sensex gained 14.38 per cent.

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    Till February 6, the first 30 sessions of the year, Sensex was up merely 0.12 per cent in 2020, which was the second worst in last five years, next to the 5.74 per cent drop seen in 2016.
    The 30-share Sensex has seen the worst start to a calendar year since 2016, as a slowdown in the economy, outbreak of the coronavirus in China, subdued corporate earnings and disappointment from the Budget weighed on sentiments on the Street.

    Till February 6, the first 30 sessions of the year, Sensex was up merely 0.12 per cent in 2020, which was the second worst in last five years, next to the 5.74 per cent drop seen in 2016. The 50- pack Nifty was down 0.25 per cent in the same period, marking its third worst opening of the year in the last five years.

    This comes on the back of a relatively good 2019, during which Sensex gained 14.38 per cent and Nifty 12.07 per cent.

    D-Street experts believe investors need to have lower expectations from markets, as returns from every period will not be the same.

    “We need to tone down expectations in India, because when one have the habit of entering the equity market with an assumption to make 15-20 per cent. In reality, you have not made anywhere close to that in last five years; 7 per cent is what your compounded return from Nifty over the last five or six years,” market veteran Shankar Sharma said in an interview with ET Now.

    feb-6-returns

    In the Sensex pack, Bharti Airtel has been the runaway gainer in 2020 till now, jumping 20 per cent after the company raised funds to pay its massive statutory dues. Concerns over its rival Vodafone Idea’s sustainability has also helped the stock as it stands as major beneficiary if the Voda Idea collapses.

    ICICIdirect has a ‘buy’ recommendation on the stock with a price target of Rs 630. It closed at Rs 546.75 on Thursday.

    Among other gainers in the pack are HUL (up 12 per cent), UltraTech Cement (10 per cent), Bajaj Finance (10 per cent) and Nestle India (10 per cent). Meanwhile, ONGC has fallen 17 per cent in the same period. IndusInd Bank (down 12 per cent), and ITC ( down10 per cent) have been among the big losers year to date.

    ITC saw a drop in its price after the government proposed increased taxes on cigarettes. Credit Suisse in a note said tax on cigarettes has been increased 11-16 per cent across various slabs, which will require ITC to take a 10-15 per cent price hike that too in a very weak macro environment. This may cause a high single-digit volume decline, the global broker added.

    Unlike the benchmark indices that remains subdued, fortunes of the broader market indices have changed in 2020. Year to date, BSE Smallcap index is up 8 per cent and BSE Midcap index 6 per cent. Both the indices had a poor 2019, as the former shed 6.85 per cent, and the latter 3.05 per cent.

    “We are going to see a larger participation in midcaps and smallcaps. That view has not changed despite the fall we saw after Budget. We are going to see a shift to cyclicals and value from the so-called quality stocks, which have done exceptionally well in the last few years,” said Navneet Munot, Chief Investment Officer of SBI Mutual Fund.

    Dalal Street mavens have also downplayed global risks from the coronavirus that has taken nearly 650 lives and has infected over 30,000 people across the world. Three people in Kerala have also tested positive.

    “Coronavirus is a source of near-term worry and near-term volatility. Because, by the time summer arrives, they will all die. Given that the country has had past experiences of dealing with SARS, our view is that these would eventually get handled,” said S Naren, ED & CIO of ICICI Prudential AMC.



    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

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    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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