Power, capital goods, metals, fire up small and mid-cap stocks
An uptick in capital expenditure aided by a gradual moderation in inflation from its peak of 7.79 per cent in April to 6.71 per cent in July has ensured that the rally is broad based, with even the mid-cap and small cap indices rising 16.3 per cent and 15.6 per cent, respectively.
Market experts said while industrials and capital goods sectors are benefiting from higher capital expenditure by both the government and private sector, companies are set to benefit from the decline in input costs as well. (Express Photo) The market rally over the last six weeks which took the Sensex up 15.8 per cent to close at 59,462 Friday has been driven mostly by sectors that benefited from a decline in global fuel and commodity prices.
An uptick in capital expenditure aided by a gradual moderation in inflation from its peak of 7.79 per cent in April to 6.71 per cent in July has ensured that the rally is broad based, with even the mid-cap and small cap indices rising 16.3 per cent and 15.6 per cent, respectively.
A comparison of the performance of sectoral indices over the six-week beginning June 17 reveals that companies whose revenues and profit margins are dependent on global commodity prices have outperformed. For instance, the BSE Power Index has been the biggest gainer, jumping 26.5 per cent since June 17. The capital goods index rose 22.6 per cent, industrials 21 per cent, metal 20.8 per cent, consumer durables 20.6 per cent and auto 19.9 per cent.
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