Post Narendra Modi-led BJP win, market rally sees wider participation from BSE 500 companies

May 28 2014, 08:51 IST
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Investor attention towards the beaten-down small-sized stocks has increased in 2014. PTI Investor attention towards the beaten-down small-sized stocks has increased in 2014. PTI
SummaryInvestor attention towards the beaten-down small-sized stocks has increased in 2014.

A higher number of stocks have accounted for the market gains since May 16 after the BJP-led NDA won the elections with a comfortable majority. While benchmark indices have continued to scale record highs during the period, the number of BSE 500 stocks, which touched respective 52-week highs, has seen more than a three-fold increase in the following seven trading sessions. Generally, this number reflects the underlying strength of a market rally, with a higher number representing increased investor interest towards mid-cap and small-cap companies. Indeed, Investor attention towards the beaten-down small-sized stocks has increased in 2014. Not surprisingly, benchmark indices representing this space have outpaced large-cap indices for the year so far. Since the election outcome, while the Sensex and the broader BSE 500 index have both moved up 2.7% and 4.8%, respectively, the mid-cap and small-cap indices on the BSE have rallied as much as 9.5% and 14%, in that order.

In the seven trading sessions to Monday, on an average, 142 BSE 500 stocks touched their 52-week highs compared to 38 in the first half of the month. With the market rally widening in scope, stocks from various cyclical and capital-intensive sectors have seen higher momentum. Such stocks include capital goods players Blue Star, BHEL, Crompton Greaves, L&T and Siemens, as well as metal producers like Jindal Steel & Power, Sesa Sterlite, SAIL, Tata Steel. Even infra and power goods players like GMR Infra, JP Associates, Indiabulls Power, Reliance Power, Torrent Power, Tata Power, GVK Power and IRB Infra have touched respective 52-week highs. State Bank of India, Punjab National Bank, Axis Bank, UCO Bank, IDBI Bank, Indian Overseas Bank, Central Bank of India and Bank of India were some of the stocks from the banking space that climbed the mark.

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