Power, Metal top gainers as markets report reasonable growth in FY22 - analysts list hits, misses

BSE Sensex and Nifty50 have slipped by almost 2 per cent on the year-to-date (YTD) basis as on the back of negative global cues. While, the former has gained over 15.5 per cent, the latter gained by almost 17 per cent in the financial year 2021-22 (FY22).

The crisis between Russia-Ukraine pushed the global commodity prices including crude oil and metals to new highs. This eventually helped sectors like power, utility and metals to post over 50 per cent gains, clearly leading to outperformance against the benchmark indices by a big margins, experts believe. 

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Market analyst Rahul Shah, who is a Co-Head of Research at Equitymaster said, “While the gain in power and utilities had to do with domestic factors like attractive valuations and expectations of a big bang reform, the bull run in metals had a global flavour.” 

Factors like rising inflation, supply chain disruptions and Russia-Ukraine war fueled the inflationary fire in metals. This led the sectoral stocks to go up strongly during the fiscal, Shah added. 

Similarly, another market analyst Ajit Mishra, a VP Research at Religare Broking, also mentioned that metal has been the top outperformer, thanks to the sharp rise in commodity prices globally due to strong demand recovery and supply side concerns, along with Power and Realty sectors.  

In terms of underperformance, sectors like auto and finance failed to find favour with investors and underperformed the benchmark indices by a big margin, Co-head research at Equitymaster said. 

Moreover, IT continued its strong momentum and ended with returns of more than 30 per cent despite the tepid last quarter. On the flip side, auto, banking and FMCG grossly underperformed the benchmark indices, Mishra added. 

According to Religare Broking’s VP-Research, “The markets continued their buoyant mood for FY22. The easing COVID restrictions and strong recovery in the economy were the hits during the year which aided sentiments.” 

Amongst the misses, concerns over rising inflation and geopolitical tensions impacted sentiments in the last quarter, Mishra said, adding further that Fed's hawish stance, rising crude oil prices and sub-par earnings show have led the foreign investors to take money out from Indian markets in FY22.