Oil & gas, energy, PSU banks among 5 key index underperformers during first half of FY25

Stock Market Today: The benchmark Nifty 50 index gained 14.91% during the April-September 2024 period or the first half of FY25.

Against this backdrop, five key indices emerged as underperformers during the period. These include Nifty Oil & Gas, Nifty Energy, Nifty Private Bank, Nifty Bank and Nifty PSU Bank indices.

While the Nifty Oil & Gas index gained 13.35% during the first half of FY25, it underperformed the stronger gains recorded by the Nifty 50 index.

The underperformance in the oil & gas index has been led by volatility in crude oil prices. After rallying to a peak of $90 a barrel in April, the Brent crude oil prices have been on a downward trajectory. The windfall tax for upstream oil & gas producers and some overhang on oil marketing companies such as Hindustan Petroleum Corporation, Indian Oil Corporation and Bharat Petroleum Corporation led to this underperformance despite strong earnings prospects.

Meanwhile, Nifty Energy, with gains of 11.36%, was another underperformer compared to Nifty 50.

The Nifty Energy index comprises of oil and gas companies, such as ONGC, Indian Oil Corporation, Bharat Petroleum Corporation and Reliance Industries, along with firms engaged in power production, transmission and distribution, and green energy, including Coal India.

Banks -Key underperformers

Nifty Private Bank and Nifty Bank with 11.36% and 11.35% gains, respectively closely trailed the Nifty Energy index. While these indices may have shown lower growth compared to the Nifty 50, expectations remain high from private banks on a rebound in performance.

Nifty PSU Banks, however, saw a decline of 5.02% during the first half of the financial year. Analysts said PSU banks had a strong FY24 and are now awaiting fresh triggers as most positives are currently priced in.

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