As many as 84 per cent of Nifty constituents were under pressure during June 2022, as only eight heavyweights closed higher in the last month, of which three were from Auto segment and 31 stocks in Nifty underperformed the markets, Motilal Oswal said in its monthly report of India Chart.

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Among Nifty constituents, 26 per cent traded higher in the calendar year 2022 Year-To-Date. M&M, Coal India, ITC, NTPC, and Bajaj Auto led the gainers pack in year-to-date gaining up to 31 per cent.

Hindalco, UPL, and Tata Steel were top losers in the previous month between 18-20 per cent, followed by IndusInd Bank, Tech Mahindra and Bajaj Finserv each surged around 15 per cent, and Bajaj Finance, Titan, Wipro, and Shree Cement slipped between 11-14 per cent in June.

On the contrary, auto heavyweights such as Maruti Suzuki and M&M 6 per cent in an otherwise negative market in June 2022, while JSW Steel, Divi’s Lab, ITC, and Dr Reddy’s Lab gained between 1-2 per cent in June.

The Nifty declined nearly 5 per cent month-on-month, MoM, in June 2022, after a 3 per cent fall in May 2022. The market closed in the red for the third consecutive month and notched the steepest MoM decline since March 2020.

The adverse macro backdrop, with heightened worries on rising interest rates, elevated crude oil prices, and liquidity tightening, has kept the market volatile and jittery, Motilal Oswal said.

After the correction, the Nifty trades at 18.4x FY23E, below its 10-year average P/E of 19.5x. The brokerage finds more value in largecaps than midcaps, given the relative valuation equation.

Notwithstanding the COVID-induced gloom and weak economic recovery, corporate profit has bounced back from the lows. The corporate profit-to-GDP ratio rebounded to a 10-year high of 4.3 per cent (long-period average of 3.7%) in CY22 as profit grew at a faster pace up 48 per cent YoY.