It may be winter but most bears have been given a good hiding. The current bull run has steamrolled a lot of worries; be it faltering growth, earning downgrades, the Goods and Services Tax implementation hiccups and the Reserve Bank of India’s refusal to play ball on interest rates. In this ‘new normal’ market, even the threat of a North Korean nuclear war gets discounted in a couple of sessions. But as the year draws to a close, the benchmark indices, Nifty and Sensex, have given up some of their gain on uncertainty about the upcoming Gujarat assembly elections and fear of the FY18 fiscal deficit being breached. Still, as this special issue goes to print, they are up 22% for the year.
More than foreign portfolio investors, who have been the traditional market driver, this time around domestic mutual funds have played a bigger role by pumping in over 100,000 crore into equities. This inflow is more than thrice what they had invested in 2016 and twice what foreign institutional investors have pumped in year-till-date. Not surprising that buoyed by ebullient retail investors, the country’s top mutual fund houses are making a beeline to list, with Reliance AMC first off the block.
Almost everything has moved north but those punting on the right mid-cap names have made a killing. Over 130 stocks have doubled between January and November 2017 against just 13 in 2016. Last year, the clobbering post-demonetisation did play a role and many stocks might have given away their gain in November 2016. This year, 85 stocks in the 500 crore to 5,000 crore range have seen their market cap double. For a detailed view, see The Year Of Multibaggers.
Cherry picking stocks at the beginning of the New Year is an annual ritual for us and this year is no different. For the coming year, we have got 16 market analysts to put their neck on the line. Their recommendations span across financials, auto, housing materials and construction, hospitality to FMCG. Happy investing in 2018!