India beats US, Japan, Korea stock markets; Sensex, Nifty gain 3.5% in October after losing in Sept

Indian share market mapped an upward trajectory in October after sliding 1.2 per cent in the previous month. The broader market Nifty 50 index regained the crucial 12000 mark in the intraday deals last month. Despite global concerns related to COVID-19 pandemic due to which many European countries imposed restrictions to curb the fast-spreading virus, Indian share market added 3.5 per cent in October. Moreover, foreign institutional investors (FII) inflows made a comeback in October and stood at $2.5 billion. Among sectors, Private Banks, Cement, NBFCs, Real Estate, Technology and Utilities were the top outperformers. According to a recent report by Motilal Oswal Financial Services, on a year-to-date basis in the calendar year 2020, sectors such as Healthcare, Technology and Cement were the only positive performers, gaining 43 per cent, 36 per cent and 15 per cent, respectively.

India was among positive-performing markets in October 2020, which closed over 4 per cent higher in local currency terms. The brokerage firm noted that Russia, UK, US, Korea, Japan and Brazil declined up to 9 per cent and were among the laggards. It also said that Indian equities were trading at 24x FY21E earnings. “Brazil is the only market trading at a premium, while other key markets continue to trade at a discount to India,” Motilal Oswal added.

Motilal Oswal Financial Services in its report highlighted that in the world market cap, India’s share stood at 2.3 per cent, which is below its historical average of 2.5 per cent. Over the last 12 months, world market cap has increased 9 per cent ($7.3t) while India’s market-cap remained flat.

The overall breadth in Indian equities remained positive in October 2020, as a total of 32 Nifty stocks ended higher. Kotak Mahindra Bank led the pack of gainers, followed by Axis Bank, Tata Steel, UltraTech Cement and Asian Paints, surging as high as 22 per cent. On a YTD basis in the calendar year 2020, pharma and IT stocks topped the list with Divi’s Laboratories, Dr. Reddy’s Laboratories, Cipla, HCL Technologies and Infosys as leaders. On the flip side, IndusInd Bank, ONGC, Coal India, State Bank of India and Bajaj Finserv were the worst performers. Over the last 12 months, MidCap stocks have managed to gain one per cent, as compared to a fall of 2 per cent in Nifty 50.

In October 2020, the Nifty MidCap 100 was up half a per cent as compared to a 3.5 per cent rise in the Nifty 50 index. From the MidCap space, the best performers were Laurus Labs, Brigade Enterprise, Trident, Federal Bank and Alembic Pharma.