Interesting Analysis on 2017 Indian Stock Market

Some interesting insight on stock market performance 2017 and how to optimize our way for 2018

It is an year when I observe a lot of investment coming in and surprisingly from domestic front . Also I see a great inflow of money in equity through various mediums such as Mutual funds, Sip, Elss and direct equity. Thus, 2017 was the year with goodwill for investors. So lets have a look into some interesting details:

  • First , the Nifty went up by 28 percent from Jan to Dec 2017 with smaller stocks did better than their peer.
  • Practically every sector has gained. Except pharma sector which performed at minus 7 percent for 2018. As exports to US have been concern because of FDA closing down facilities and slow API approvals.
  • Another under performing sector IT returned 12 percent, since US visa issue and rupee strength has pushed up cost.
  • Now sectors with big gain: Bank(up 42 percent),Energy (up 35 percent),Metal(up 45 percent) and Realty(up 88 percent).

But these gains prompt caution to check whether the factors that push the gain still sustain or we need to correct our strategy for 2018. Let us take some detail:

  • In Banks even though the private counterpart is highly valued but there NPAs are in growth too. Further more public bank valuation spiked with the boost of massive recapitalisation scheme,but in PSU banks too NPAs are on growth.RBI projections suggests NPAs will peak in September¬† 2018.
  • Energy gain was simple. Crude and gas prices were low, retail prices were decontrolled and margin for exporters were high.This year won’t be same as crude oil prices are on rise. And there would be questions on retail price freedom if crude oil price rise beyond a certain point.
  • Metals has been well supported by policies such as anti dumping duties, which shielded the domestic industry. Production cuts from China gave further boost, which was enjoyed by non ferrous metals too.
  • Reality gain is odd to me as real estate prices are stagnant or fallen but reality stocks has nearly doubled in price. Earnings too are flat. There is an over optimism maybe based on future prospects of RERA, Benami Act etc. But even if that happen to equate the valuation will take a lot of time in my opinion.

So invest to gain but keep caution as some one said it right:

“There is only one side in the stock market; and it is not bull side or the bear side but the right side”.

Experience of 8 years in stock investment. I learned everything by making a lot of mistakes and losing a good amount of money, I am here to make sure you don’t lose on either: Hope or Money.

Leave a Reply