2023 in review: Over 40 Nifty50 stocks rose between 10% and 90%; Tata Motors, NTPC top gainers
Commencing the year with a tentative stumble amid concerns of a potential global recession and fears of rate hikes from major central banks, both the Nifty 50 and S&P Sensex experienced declines of 4.12% and 3.03%, respectively, in the first three months.
However, the indices swiftly rebounded in April, propelled by robust Foreign Portfolio Investor (FPI) inflows, a rate hike pause by the Reserve Bank of India, and a sharp drop in crude oil prices. The indices continued the same momentum for the next two months, closing the first half of CY23 with a gain of over 6%.
The market witnessed a more impressive rally in H2CY23, with the majority of additions coming in November and December, owing to India’s strong 7.6% economic growth in the September quarter, the BJP’s decisive victory in three out of five crucial state elections, and strong FPI inflows.
Additionally, the recent indications of potential rate cuts by the US Federal Reserve in 2024 and the surge in the Index of Industrial Production (IIP) to a 16-month high in October, coupled with the RBI’s positive remarks on India’s GDP forecast, have also contributed to positive investor sentiment.
The culmination of a strong rally in November and the first week of December propelled the market capitalisation of NSE-listed companies to surpass the historic $4 trillion mark for the first time on December 06.
Record-breaking rally
The Nifty 50 achieved remarkable milestones in 2023, breaking through the 19,000 level in June and reaching 20,000 in September. On December 08, it soared past the 21,000 mark, culminating in a record high of 21,492 points over the next five trading sessions.
Likewise, the S&P BSE Sensex also scaled unprecedented heights this year, surpassing the ₹64,000 mark in June and reaching 67,000 level in July. In November and December, the index experienced a substantial jump of 7,731 points, or 12.12% to set a historic high of 71,605 points.
Overall, the Nifty 50 and S&P BSE Sensex gained 18.30% and 17.22%, respectively, in the current year so far.
Auto stocks accelerated
Auto stocks experienced a robust surge this year, driven by factors such as improving economic growth, rising personal incomes resulting in increased demand, and a premiumisation theme leading to a shift to SUVs, which led to strong demand.
In addition, the easing availability of semiconductor chips and a decline in steel and aluminium prices have contributed to the recovery of gross margins for automakers.
Amid this backdrop, auto stocks performed strongly this year, with Tata Motors topping the Nifty 50 with a return of nearly 90% thus far. This marks the stock’s third-best yearly performance in the last 20 years.
Similarly, Bajaj Auto, the flagship company of Bajaj Group, saw its shares perform exceptionally well on the exchanges this year, gaining 73% so far, marking the stock’s best yearly performance since 2010. The stock this year crossed the ₹6,000 mark and registered a new record high of ₹6,402 apiece.
Hero MotoCorp stock also delivered a stellar return of 42.27%, surging from ₹2,738.85 apiece to ₹3,896 apiece. Currently, the stock is just 2.6% away from the ₹4,000 milestone. Eicher Motors also joined the rally, with a 26% jump and surpassing the ₹4,000 mark for the first time in December, reaching a record high of ₹4,200 apiece.
Other players in the sector, including Mahindra & Mahindra and Maruti Suzuki India, also delivered returns of 38% and 22.46%, respectively.
Surge in electricity demand boosted power stocks
NTPC, India’s leading power generation company, secured the second position among Nifty 50 stocks in 2023 with an impressive return of 83.30%. This surge in shares was primarily fueled by a robust increase in power demand, aligned with the uptick in economic activities.
Analysts underscored that despite the growth in renewable capacities, the focus on and dependence on thermal power generation are expected to persist, proving advantageous for power generation companies.
The solar power production caters to daytime demand, and the evening demand is met by enhancing thermal Plant Load factors, a trend likely to continue until renewable storage capacities are established, a development anticipated four to five years from now, as per the analysts.
In tandem with this, NTPC is actively diversifying into renewable energy, including ventures into green hydrogen. With an ambitious goal of achieving 45–50% of its capacity from non-fossil fuels by 2030, the company has set a medium-term target of 60 GW of renewable capacity by 2032.
Similarly, the Power Grid Corporation, a Maharatna Central Public Sector Undertaking (CPSU) and the largest electric power transmission company, witnessed a remarkable surge in its shares. Starting the year at ₹160.55 apiece, the company’s shares soared by 48%, reaching the current level of ₹237.45 apiece.
OMC stocks soared as crude oil prices witnessed a significant drop
The stocks of India’s premier fuel retailers—IOC (Indian Oil Corporation), BPCL (Bharat Petroleum Corporation Limited), and HPCL (Hindustan Petroleum Corporation Limited)—have experienced a significant upswing this year. This surge is attributed to the improvement in refining margins on the back of sharp drop in crude oil prices.
HPCL claimed the top spot among OMCs this year with a robust gain of 63.26%. Notably, a substantial portion of these gains occurred in the month of November. Similarly, IOC and BPCL delivered fabulous returns of 62% and 36%, respectively, in CY23 thus far.
IT stocks jumped on US Fed rate cut signals
The recent signals hinting at potential rate cuts by the US Federal Reserve in 2024 have sparked robust buying activity in Indian IT stocks, driven by the anticipation of increased demand in the US economy.
HCL Technologies emerged as a standout performer with an impressive rally of 43.50%. Following closely, LTI Mindtree secured a noteworthy gain of 40.5%, while Tech Mahindra rallied 28.5%.
Several other Nifty 50 stocks, such as Larsen & Toubro, Coal India, Ultratech Cement, Titan, ITC, ONGC, Adani Ports and SEZ, Dr Reddy’s Laboratories, IndusInd Bank, Sun Pharma, Nestle, Tata Consumer Products, Bharti Airtel, Apollo Hospitals, Grasim, Tata Steel, Hindalco, Axis Bank, HDFC Life, TCS, SBI Life Insurance, Bajaj Finance, ICICI Bank, Wipro, Britannia Industries, Cipla, Bajaj Finserv, and JSW Steel, have yielded returns ranging from 10% to 67.40% in CY23 so far.
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 making any investment decisions.
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Published: 18 Dec 2023, 06:10 PM IST
