These stocks gained over 35% this week; will the rally continue?

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It was another momentous week for the markets with the equity benchmark indices settling at a record highs. On Friday, the Sensex rose 374 points or 0.72% to settle at 52,474. The Nifty 50 index gained 129 points or 0.82% to settle at 15,799.35.

The broader markets continued their outperformance to benchmark indices as the BSE MidCap index added 416 or 1.85% to settle at 22,927. Similarly, the BSE SmallCap index advanced 854 points or 3.52% to settle at 25,116.

A little dig into the BSE500 index shows that as many as 37 constituents of the index delivered double-digit returns to investors this week. With a gain of 40.17% Adani Power was the top performer of the week as its shares rallied from Rs 105.80 on June 04, 2021, to Rs 148.30 on June 11, 2021. Alok Industries (up 38.89%), Deepak Fertilisers & Petrochemicals Corporation (up 35.05%), eClerx Services (up 27.80%), Birlasoft (up 20.93%), Future Consumer (up 20.74%), Network 18 Media & Investment (up 20.60%) and Quess Corp (up 20.01%) were the other stocks that rallied over 20% this week.

“Nifty rose for the fourth consecutive week, ending 0.82% higher for the week. Advance decline ratio fell again but remained above 1:1, as periodic profit taking by investors resulted in this. Overall sentiments remain up, inflation fears seem overdone and investors now await US Fed’s decision on June 16,” said Deepak Jasani, Head of Retail Research of HDFC Securities.

Top gainers

CRISIL (up 18.93%), Metropolis Healthcare (up 17.78%), VRL Logistics (up 17.66%), Vakrangee (up 17.47%), DB Corp (up 17.27%), Piramal Enterprises (up 17.04%), Thyrocare Technologies (up 16.83%), Nava Bharat Ventures (up 16.42%) and Tata Power Company (up 16.23%) were among other majors gainers of the week.

Outlook

Market participants will be looking forward to WPI inflation data for May will be released on 14 June 2021. Progress of monsoon will be closely watched. Investors will also look forward to Prime Minister Narendra Modi will virtually participate in the outreach sessions of the G7 Summit on June 12 and 13 where leaders are to exchange views on the way forward on global recovery from the pandemic.

Progress of monsoon will be closely watched. The Indian Meteorological Department has predicted a normal monsoon in most parts of the country in June. As per the weather department, the country is likely to experience 101 per cent rainfall during the monsoon season. The IMD will issue the forecast for the July rainfall in the last week of June 2021.

Besides Covid caseload, the movement of the rupee against the dollar and crude oil prices, the trend in global stock markets will dictate the trend on the bourses in the near term. Investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) will be monitored.

“In the coming week, India’s inflation data for May, which is expected to be elevated, will be the key economic driver in the domestic market. On the global front, the Fed’s monetary policy meeting will be in focus as the market awaits its stance on continuing stimulus measures,” said Vinod Nair, Head of Research at Geojit Financial Services.