The Indian equity market finished June on a strong footing, with investors' confidence remaining resilient, driving stocks towards new record highs. This positive momentum not only surpassed previous benchmarks but also exceeded analysts' estimates, showcasing the market's robust performance.
Despite weak global sentiment, including heightened tensions in the Middle East, a surge in crude oil prices, a strengthening dollar, and diminishing hopes for Fed rate cuts, investors remain optimistic about the Indian equity market. The country's strong fundamentals have effectively outpaced these global concerns, bolstering investor confidence.
The month began with significant volatility, but steady participation from private banks, IT, and auto stocks helped stabilise the market. This resilience, coupled with a strong rally in FMCG stocks, contributed to the frontline indices recording their best monthly performance in 2024 so far.
Broad-based gains were observed across various sectors, with the Nifty 500 index experiencing its largest monthly gain since December 2023, growing by 6.90%. The first half of the current year saw an impressive 16.11% increase, driven by notable performances from PSU, capital goods, real estate, and railway-related stocks.
Looking at the benchmark indices, both the Nifty 50 and Sensex ended June with record performances. The Nifty 50 gained 6.60%, marking its largest monthly gain since December 2023, while the Sensex also posted its highest monthly gain in seven months, finishing June with a 7% increase.
Among the 500 stocks comprising the Nifty 500, 13 stocks have gained between 100% and 230%, with defence stocks leading the way. Shares of Cochin Shipyard emerged as the top performer, generating a return of 230% as they finished 5 out of 6 months in positive territory, with April and May alone generating returns of 50%.
Defence stocks have become investors' hot picks due to the government's emphasis on the sector by increasing capital expenditure and setting notable targets, such as achieving 70% self-sufficiency in weaponry by 2027, making the sector highly attractive.
Similarly, Garden Reach Shipbuilders delivered a massive return of 140% during the first half of the current year.
On the other hand, the capital goods sector has also garnered significant attention from investors. This sector, encompassing industries that manufacture machinery and equipment used for industrial production, construction, and infrastructure, has shown remarkable performance, with stock returns ranging from 100% to 140%.
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Shares of Hitachi Energy India, Schneider Electric Infrastructure, and Cummins India have rallied 140%, 111.5%, and 102%, respectively, during the first half of the current year.
As the BJP-led NDA formed the government at the center, investor expectations regarding policy continuity towards housing and railways have driven a strong rally in these stocks in June, propelling them to register strong gains in H1 2024.
Shares of Rail Vikas Nigam, HUDCO, and Jupiter Wagons have delivered returns of 130%, 123.3%, and 116%, respectively. Other stocks, such as Aegis Logistics, Oracle Financial Services, Hindustan Zinc, Sobha, and Amara Raja, have gained between 100% and 148%.
Overall, 110 stocks from the Nifty 500 index concluded the first half of the current year with returns exceeding 40%.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
