Indian equity market seems to continue its downward trajectory as the frontline index Nifty50 has fallen nearly 5% this month. In the first six months of 2022, the Nifty looks set to close in the red, marking its fifth monthly decline in six. The index has slumped over 9% YTD.
Investor sentiment remained sour on the back of a number of global as well as domestic factors. Central banks worldwide increasing interest rates to combat surging inflation, coupled with fears of recession, has dampened the risk appetite.
Indian economy is also bearing the brunt of high crude oil prices, which also negatively impacts the margins of companies in different sectors. Relentless selling by Foreign Institutional Investors (FII) and Foreign Portfolio Investors (FPI) in the Indian equity market has deepened the correction. The FPIs have so far pulled out more than Rs 2 lakh crore from Indian equities in the first six months of 2022, as per data available on the National Securities Depository Ltd (NSDL). FPIs outflows in June so far are around Rs 50,000 crore.
Barring Nifty Auto, all other sectoral indices have witnessed selling pressure this month. The Nifty Auto index is up more than 4% in June as against a nearly 5% loss on the Nifty during the same period. The worst performing sectoral index this month is Nifty Metal which plunged around 9%.
Take a look at the top Nifty stocks that have outperformed the benchmark index in the last one month (May 28-June 28):
|Sr. No.||Stock||1 Month Change %|
|1||Mahindra & Mahindra||15%|
|2||Maruti Suzuki India||7%|
|5||Oil And Natural Gas Corporation||3%|
|8||Tata Consultancy Services||1%|
|10||Tata Consumer Products||1%|
Mahindra & Mahindra
The automobile major Mahindra & Mahindra has surged more than 15% in the last one month, posting a strong rally in the otherwise weak market. The stock has jumped over 31% YTD and is up 40% in the last three months. It hit a 52-week high of Rs 1,121.45 on June 28.
The stock has been rising on the back of positive sentiment led by strong sales across its automobile and farm equipment segment. The company is witnessing strong bookings for its new models, and it has also increased its capex plan for the auto division amid growing demand.
Further, the timely arrival of south-west monsoon and forecast of normal monsoon going ahead have increased the prospects of strong tractor demand for the company.
Maruti Suzuki India
Maruti Suzuki, the largest passenger vehicle manufacturer in the country saw robust gains of around 7% in one month amid strong demand and an improving outlook for the automobile sector. Stable commodities prices have increased hopes of improvement in margins of the automobile major.
During the month, Maruti Suzuki also announced the opening of bookings for the new version of its compact SUV Brezza. Maruti Suzuki shares have rallied over 14% YTD, outperforming the Nifty Auto index which gained more than 7% during the period.
Shares of JSW Steel rallied over 5% in one month outperforming the Nifty Metal index as well as the benchmark Nifty50. The stock move comes after a sharp 24% slump seen in the month of May. However, the stock is still down 12% YTD.
JSW Steel’s operating performance has remained strong. The company has an installed annual crude steel capacity of 18 million tonnes in India. This comprises of 12.5 MTPA of flat products and 5.5 MTPA of long products.
Shares of Eicher Motors rallied 4% in the last one-month period and gas gained nearly 10% YTD. The total market cap of the company stands near Rs 77,900 crore. Eicher Motors’ product portfolio includes commercial vehicles as well as Royal Enfield two-wheelers.
Positive outlook from market analysts for the automobile sector amid signs of easing cost pressures with the price hikes by automobile companies and strong demand propelled the rally in auto stocks.
Oil & Natural Gas Corporation (ONGC)
The state-owned oil explorer Oil & Natural Gas Corporation (ONGC) has gained nearly 4% in one month against a 4% fall in the Nifty Oil & Gas index.
ONGC shares have remained volatile amid the heightened volatility in the international crude oil prices. However, the outperformance in the stock so far has been led by rising oil prices. High crude oil prices provide a boost to upstream oil and gas companies like ONGC. Moreover, expectations of a hike in domestic natural gas prices going ahead have further improved the earnings outlook for the company.
Along with these companies, Coal India, Hero MotoCorp, Tata Consultancy Services (TCS), Baja Auto, and Tata Consumer Products, among others have also risen in the last one month, though to a small extent, outperforming the frontline Nifty index.