One in five BSE-500 stocks hit a century in terms of its valuation in 2014.
As per a back-of-the-envelope calculation of stock prices, 105 stocks saw their prices jump more than 100%, with at least 13 growing three times their value on January 1, 2014.
While the Sensex gained 30.07%, rising from 21,140.48 on January 1 to 27499.42 on December 31, the Nifty gained 31.38%, moving from 6304.0 points to 8282.7 in last 12 months. The rise was backed by overseas investors who pumped Rs 97,054 crore in the local equity markets last year.
G Chokkalingam, founder and managing director, Equinomics Research and Advisory Pvt Ltd, told dna, “The biggest trigger for the equity markets in 2014 was political stability at the Centre, thanks to absolute majority won by the NDA government in the general elections of 2014.”
The emergence of NDA government led by Narendra Modi improved sentiments not only among the domestic investors, but also their foreign counterparts.
There was also a widespread expectation among the industry that the new regime would set the ball rolling on reforms front. Also, fall in commodity prices led to a hope of interest-rate cut that will ultimately spur growth.
While the stupendous growth in equity markets in 2014 held investors and equity analysts spellbound, some believe that the bull run may lose its steam in 2015.
Ambareesh Baliga, a market expert, said it's unlikely that the performance in the equity markets will be repeated in 2015 as the bull run in the previous year was led by an improvement in sentiments without a change in ground reality.
“For the situation on ground to improve, the government needs to increase capital expenditure and set up new manufacturing plants.”
Baliga believes that the recent ordinance on land acquisition Bill will help kick-start the existing infrastructure projects that are stalled.
Chokkalingam said, “There may be a 10-15% rise from the current levels if there are no important negative triggers from the US and China, which account for 50% of the incremental GDP growth of the world.”
For 2015, Baliga bets on core sectors which will contribute to the building India story. Topmost among them is the infrastructure sector which has underperformed the broader market since July. Apart from this, he is also betting on capital goods, cement, metal and power stocks. Among individual names is favourites are L&T, BHEL, NTPC, Adani Power and Ambuja Cements.
He said the ''need of the hour is the convergence of sentiments with reality.''
Sector-wise, the biggest gainer for 2014 was consumer durables, up 66.18% followed by banks (up 65.04%) and auto (up 51.98%).
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