Markets has been highly volatile during the due course of either the nation’s election or the final budget.
Global tensions and trade wars further supports the turbulence in the Indian Market. Now, the First Quarter results of FY19-20 of Indian Inc. ahead in the coming weeks, turning into the turmoil of risky trades. During all these volatility, stocks that outperformed in Nifty 50 has created both the hype and concern in the Investor’s mind with the Top-out of the Market. But does it really the High Point Range of Nifty for the next 5-10 years?? Or just for months?
When analyzing the Nifty 50 as an Index, the Industries which weightily takes Nifty to new highs is less as compared to the entire Composition.
Here’s the look:
As shown in the Chart, major portion of Nifty 50 is covered by
- Banking & Financial Industry with 35%,
- Crude Oil & Natural Gas with 19.43% and;
- Technology (Computer Softwares) takes 22% of Nifty 50 Index.
Making the composition to 76.40% approximately of the Index. Rest 24% is covered by Pharma, FMCG, Automobiles, Telecom, Construction and other sectors of the Nifty Index.
In the last 3 years i.e. 2017-2019. Nifty has given 13.50% approximately annualized return to the investors until June 2019. And only the 17 stocks have out-performed the index returns (as benchmark) during the period thus, making the other industries like in the Un-Reserved Category of performance.
That’s Interesting to see that the nation’s growth in the last 3 years was entirely dependent on these 3 majors Industries. Making the others as Non-performing Sectors with Automobile and Pharma Sectors as the major laggards.
Stocks Performance in Last 3 Years
List of stocks which performed well in the last 3 years
- 3 Years Stocks Returns(Top Performing Stocks of Nifty 50)
Either the other Nifty stocks performed well or not, these stocks are becoming the lucrative face of Investments to the Institutions & other market Participants.
Detailing further with the list laggard companies with negative returns in last 3 years
In terms of market capitalization, Nifty 50 Index with Rs. 84.2 Lakh crore out of which 10 stocks holds 55% weightage i.e. HDFC Bank, HDFC, Reliance Industries, ICICI Bank, Infosys and others are the giants of the Index.
Itself making the Index move to the new high with the supports of the rest of the 20 stocks which neither breaks the index returns nor give the negative returns to the investors in the last 3 years.
Investors need to be aware with each selection of stocks for long-term as the current PE of Nifty-50 Index is the high range of 28-29 PE Levels which shows the caution sign with the giants as major out-performers. Though PE itself, doesn’t correspond to the peak of the index, when it comes to individual performance of the stocks. Most of the Nifty-50 Stocks has not even show their up-move and are still available at attractive valuations, thus, predicting the top-out or bottoming-out of the market can be a mediocre investment decision for investors.