These seven stocks rallied most in the record-breaking week; should you buy them now?
A closer look at the BSE500 index shows that 418 or 84% constituents of the index ended the week with gains.
The ongoing bull run on Dalal street seems unstoppable as both Sensex and Nifty are on a record-breaking spree. The week gone by has been the best for markets in this year so far, with Sensex skyrocketing 2,005 points or 3.57% to settle at 58,129 and Nifty climbing 618 points or 3.70% to settle at 17,323. 50 index advanced 618 points or 3.70% to settle at 17,323. Positive global cues, strong service PMI data and healthy GST collection numbers liquidity with FIIs putting in over Rs 6000 crore in the last four sessions were some of the key factors that boosted investor sentiment on Dalal street.
“Bulls continued to be on a rampage in the domestic market backed by favourable global cues and positive domestic economic data. Anxiety over the Jackson Hole symposium subsided due to the dovish tone of the Fed Chair which helped global markets to start the week on a strong footing,” said Vinod Nair, Head of Research at Geojit Financial Services.
The positive sentiments in the domestic market remained throughout the week as domestic economic data releases were in favour of bulls. India’s GDP rose 20.1% YoY due to the low base effect and powered by private consumption expenditure & investment. Economic data of core sectors like capital goods & industrials is edging performance while the recent high performance of the market is also tempting investors to shift to safer defensive sectors. The Indian Service PMI data rose to 56.7 in August from 45.4 in July on account of the reopening of several establishments and improving demand that boosted sales. While Manufacturing PMI showed a drop to 52.3 during August though it continued to remain in expansion mode. The auto sector showed a flattish trend as sales for August saw a decline in numbers following supply constraints, Nair added.
Broader markets
It was the second consecutive week where even the mid and small-cap participated in the rally. In fact, the broader markets outperformed the benchmark indices as the BSE Mid-Cap index jumped 1,126 or 4.85% to settle at 24,382. The BSE Small-Cap index rallied 1,021 points or 3.89% to settle at 27,305.
A closer look at the BSE500 index shows that 418 or 84% constituents of the index ended the week with gains. With a rally of 28.12% Sobha was the top performer of the week as its shares closed at Rs 768 on September 03 compared to Rs 599 on August 27. Indian Energy Exchange (up 24.29%), Brigade Enterprises (up 23.22%), Adani Transmission (up 21.83%), Vodafone Idea (up 20.40%), Prestige Estates Projects (up 20.31%) and Exide Industries (up 20.16%) were the other stocks that rallied over 20% this week.
“Nifty has been enjoying a strong bull run since last 16 to 17 months and in last few weeks also, it gave some mesmerizing moves. Although the recent momentum has been exceptionally strong, we can see some extreme levels in benchmark index now,” said Sameet Chavan of Angel Broking.
PNC Infratech (up 18.52%), Polycab India (up 17.83%), Delta Corp (up 17.79%), Trident (up 17.12%), Shriram City Union Finance (up 17.08%), Aster DM Healthcare (up 16.94%), Triveni Turbine (up 15.83%), Havells India (up 15.68%), IFB Industries (up 15.61%), Adani Power (up 15.38%) and TCNS Clothing (up 15.09%) were among the other top gainers of the week.
Outlook
The US job data disappointed investors as the economy added just 2,35,000 positions versus compared to expectations of 7,20,000 new hires. This could be a dampener for the domestic market as well, however, market participants look forward to global macroeconomic data, along with trends in global markets, in truncated trading week ahead.
Besides, the progress of the monsoon, the movement of the rupee against the dollar and crude oil prices, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) will also be watched. On the macro front, the Industrial Production and Manufacturing Production data for July will be released on 10 September 2021.
Investors will also track China inflation numbers for the month of August that will be announced on September 9, 2021. Whereas the ECB will announce an interest rate decision on September 9, 2021. While The ZEW Economic Sentiment Index for September will be declared on September 7, 2021.
“Going ahead, the market is likely to continue with its positive momentum as economic recovery and vaccination continue their northward journey. Strong liquidity and positive global cues are lively to support domestic markets to continue their movements to record levels. However, valuations are also moving beyond comfort zones and hence could lead to bouts of profit booking and an increase in volatility. Large caps offer a better margin of safety in the current environment and could continue to remain in focus in the near term as well,” explained Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.