BSE Midcap index hits record high; JSPL, Ashok Leyland surge 6%, SAIL up 5%



Shares of midcap companies were on a roll on Monday with the S&P index hitting a record high on the back of a strong rally in metals, financials and public sector undertaking (PSU) stocks.


At 12:50 pm, the S&P index was up 0.85 per cent at 18,319 levels, as compared to a 0.31-per cent rise in the S&P BSE Sensex. The midcap index hit a record high of 18,363 in the intra-day trade, surpassing its previous high of 18,321, touched on January 9, 2018.



Among individual stocks, Ashok Leyland hit a 52-week high of Rs 105, up 6 per cent on the BSE, after the company reported a 14 per cent increase in its total commercial vehicle sales at 12,762 units in December 2020. The company had sold a total of 11,168 units in December 2019.


Meanwhile, Jindal Steel and Power and Steel Authority of India (SAIL) from the metal pack rallied 6 per cent and 5 per cent, respectively. Steel stocks were in demand amid expectations of further improvement in performance due to the realisation of uptick in the domestic market and progressively lower proportion of exports.


Although steel demand in India may decrease in 2020 but it is expected to be extremely strong in 2021 on the back of government’s infrastructure investments, production linked incentives, support for rural economy through infra development, analysts say. Restarting of construction activities across India and recovery in the auto industry are also likely to support demand.


In a report dated January 4, global brokerage Jefferies said that calndar year 2021 is “likely to be a year of a synchronised pick-up in most major economies”.


“Benign monetary policies, and potential stimulus measures also provide strong backup… Indian metals should deliver a strong earnings rebound in FY22,” it added.


That apart, Bharat Heavy Electricals (BHEL), Bharat Electronics (BEL), NHPC, Hindustan Aeronautics and Oil India from the PSU pack were up in the range of 3 per cent to 5 per cent. Vodafone Idea, Cholamandalam Investment and Finance Company, Oracle Finance Services Company, Federal Bank, Muthoot Finance and Mahindra & Mahindra Financial Services gained between 3 per cent and 4 per cent.


For calendar year 2021 (CY21), ICICI Securities expect midcaps and small caps to gain relatively more than the large caps. “The delta in earnings growth during a recovery phase will be high in midcaps and small caps vis-à-vis large caps whereas multiple expansions in the former will provide additional alpha for capital appreciation. Other macro factors like benign interest rates and structural cost rationalisation measures will also aid operating and financial leverage for this category,” the brokerage firm said in a report.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor





Source link

Leave a Comment

Your email address will not be published. Required fields are marked *