Wealth creation in the equity market has slowed down this calendar year with over 70 percent of the Nifty500 stocks eroding investor wealth since January this year. On Thursday, Nifty turned negative for the year in intra-day deals amid heightened worries of the US-China trade war.
Consumer demand slowdown, foreign investor selling, weak corporate earnings, liquidity crunch, economic slowdown, and volatility in the oil market kept investors on edge this year.
Broader markets have fallen even more this year, with the Nifty Midcap and Smallcap indices declining around 11 percent and 14 percent, respectively.
However, despite over 70 percent (361 stocks) of the Nifty500 bleeding, Aavas Financiers, P&G, Info Edge, Godrej Properties, Reliance Nippon, HDFC AMC, and Balrampur Chini have rallied over 40 percent since the beginning of this year.
Analysts expect domestic sentiment to continue having a negative bearing on the Indian markets. Further, muted corporate earnings and challenging outlook provided by the corporates are also likely to weigh on stocks.
"The trend in earnings revision remains skewed in favour of downgrades and has accelerated at the margin, reflecting the weak underlying operating environment and demand commentaries. The consumption demand outlook has turned weaker, even as private banks have reported mixed trends on asset quality/rise in stressed books and cement companies have surprised on realisation," Motilal Oswal explained in a report.
Commentaries of most companies on demand remained weak and point toward continued stress in rural demand post the first-quarter earnings.
Global brokerage Phillip Capital slashed one-year Nifty target to 11,300-11,800 (from 12,200-12,700). The brokerage house expects growth to taper in favoured sectors like consumer discretionary, infrastructure (roads), and chemicals (reflecting broader economic weakness) along with negativity persisting in automobiles, pharmaceuticals, FMCG, and metals.
Aavas Financiers was the top performer in the Nifty500 index, up 71 percent this year followed by P&G, up 53.8 percent, Info Edge 53.8 percent, Godrej Properties 44.2 percent, and Reliance Nippon 43.1 percent.
Among other gainers, Just Dial, JK Cement, ICICI Lombard, InterGlobe Aviation, SRF, Astrazeneca Pharma, CreditAccess Grameen, and SBI Life rose between 30-40 percent this year.
However, the top losers for the year mainly consisted of defaulters like Cox & Kings, Reliance Communication, Reliance Power, Jet Airways, Reliance Infra, Dewan Housing, Reliance Capital, and Reliance Home Finance, down over 75 percent this year.
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