Foreign funds, rate cut could extend equities rally

Dec 24 2012, 09:33 IST
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SummaryWith the RBI indicating a rate cut in its upcoming policy review and Sensex surging over 25% so far this year on the back of strong FII inflows, 2013 seems like a cheerful year

the broad market, others barely participated in the rally. According to experts, the big gainers of 2013 are likely to be sectors that did well this year as well. These include banking, FMCG (fast moving consumer goods), consumer durable and realty. The BSE Bankex Index surged 55 per cent in the last 12 months, sharply higher than the 32 per cent gains for the CNX PSU bank index. Among banking stocks, the big gainers were private sector banks, notably Yes Bank, Axis Bank, ICICI Bank and HDFC Bank, even as public sector banks trailed their private counterparts.

In the consumer durable space, the returns were more widespread, with Whirlpool among the big gainers. The BSE Consumer Durable index registered gains of 49 per cent while the BSE Realty index surged 49 per cent in 2012. In case of real estate firms, stocks of low leverage companies such as Prestige Estates (127 per cent) and HDIL (117 per cent) saw strong rallies even as larger firms such as Parsvanath continued to slide, falling 8 per cent during the year.

The BSE FMCG index figured among the top five gainers for the second year in a row, and recorded a 48 per cent rally in the BSE FMCG Index came on the back of a 12 per cent and 19 per cent year-on-year growth in revenues and profits for the trailing twelve-month period. Nestle and Hindustan Lever Ltd were up 16 per cent and 29 per cent, respectively, during the course of the year.

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