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Defying the initial shock after the government’s move to demonetise Rs 500 and Rs 1,000 currency notes on November 8 last year, the benchmark stock indices have delivered robust returns on the back of abundant domestic liquidity and the hope of a recovery in corporate earnings.
The knee-jerk reaction in the early days after demonetisation was mainly attributed to the lack of enough cash in the system hitting consumption.
In the one year since the announcement of the note-ban move, the BSE Sensex has jumped nearly 5,800 points, or 21%, while the National Stock Exchange (NSE) Nifty has rallied 20.5% from 8,515.57 to 10,303. During the same period, the BSE Midcap and BSE Smallcap indices have surged 30% and 39%, respectively.
The combined market capitalisation of BSE-listed companies during a year since demonetisation has jumped by more than Rs 33 lakh crore to Rs 145 lakh crore. The biggest contributors to the surge in market capitalisation on BSE have been Reliance Industries, HDFC Bank and Hindustan Unilever, which together contributed over Rs 4.5 lakh crore.
Among the Nifty50 stocks, Bajaj Finance was the top gainer (up 80%), followed by RIL, Bharti Airtel, Tata Steel and Hindalco Industries, all of which jumped in the range of 57-76%. Meanwhile, Lupin was the biggest laggard in the pack, down 42% during the same period. Dr Reddy’s Labs, Tata Motors, Sun Pharma and Coal India were some of the other prominent losers.
Market heavyweight RIL has surged 77% on NSE in the past year, mainly boosted by the launch of 4G telecom services by subsidiary Reliance Jio. The company, which last week became the first Indian firm to cross the Rs 6-lakh-crore mark in market capitalisation on a closing basis, has been the most valuable firm on the bourses.
Among indices, although the Nifty Realty was the most hit during demonetisation, it recovered the most as well. The index surged over 75% in the past year to be the best-performing sectoral index followed by the Nifty Energy (up 42%), Nifty Metal (up 41%) and NSE Consumption (up 27%). The Nifty Pharma index, however, underperformed the broader indices and became the worst-performing sectoral index in the past year, with a 12% decline.
As for individual stocks, here are the top 5 gainers and losers on the Nifty50 in the past year:
|Stock Price (Rs)|
|Stock Price (Rs)|
|Dr. Reddys Laboratories||3119.00||2346.60||-24.76|
|Sun Pharmaceutical Industries||635.40||537.80||-15.36|