Lok Sabha Polls 2024: Here is how the markets fared in Modi government's second term

Lok Sabha Polls 2024: Here is how the markets fared in Modi government’s second term

It has been an eventful five-year term for the Narendra Modi-led government and even more so for the market. It has overcome one headwind after another to get to where it stands today.

No one can forget the COVID-19 pandemic and the lows of 7,511 that the Nifty made. The index trebled from those levels just a few weeks ago.

The pandemic was not the only headwind. The market went through the Russia-Ukraine war, rising oil prices, and US Fed uncertainties, which continue to date, yet remained resilient for most of it.

It has witnessed the mega Life Insurance Corporation (LIC) IPO, the Adani-Hindenburg scandal, the rise and rise of GQG, which has now become the biggest foreign investor in India’s equity markets, the mega PSU rally of the last 12 months, the trend of foreign promoters cashing in, and so much more.

Amidst all this, the Nifty, Sensex, and broader markets made new highs this month. The Sensex even crossed the 75,000 mark and market participants expect the level of 100,000 on the index sooner than later.

Let’s now go to numbers and the Nifty has nearly doubled in the last five years. To be clear, we are comparing returns from May 23, 2019, which was when the Bharatiya Janata Party and Prime Minister Modi got a second term in office. The broader markets have done well. The midcap index has nearly trebled, and the smallcap index is also up 2.5x.

Barring FMCG, almost all the indices gained at least 100% over the last 12 months. The realty index has emerged as the best performer, gaining nearly 248% during this term.

No index heavyweight features among the top performers on the Nifty 50 since May 2019. The names though, are not entirely surprising.

Adani Enterprises features as the top Nifty gainer. Tata Motors, Tata Consumer and Bharti Airtel also make an appearance here.

Only one Nifty constituent has delivered negative returns during this term, and that is IndusInd bank, which has declined 8% in the last five years. The underperformers, too, are the usual suspects, HUL, HDFC Bank and other major private banks like Axis and Kotak.

When we go sector-wise, autos lead the pack and take a look at Tata Motors DVR – over 650%. Tata Motors returns here, but Balkrishna Industries has also tripled in value since May 2019.

Metals continue to remain in focus, Hindustan Copper is up almost 7x in five years. And although Vedanta and Hindustan Zinc are recent outperformers, they are the worst performers on the index over five years.

It may be under pressure recently, but over the past five years, midcap has easily outperformed their largecap peers.

Take a look at Persistent Systems, up over 1,000%, Coforge, up 4x, L&T Technology Services has tripled, and although Infosys and TCS have doubled and nearly doubled in five years, they could not match up to their midcap peers.

On to pharma and that was a big outperformer during COVID-19 but has seen some reversion to mean since then. Laurus Labs saw most of its surge during the pandemic and is currently struggling, but among the underperformers, include the likes of Gland Pharma and Biocon, stocks that have barely moved during Modi 2.0.

Real estate was the best sector. And here, too, most stocks have at least doubled in value. However, Sunteck is an underperformer, down 10% and sticks out like a sore thumb in a list of outperformers.

FMCG struggled and is possibly the only index that does not have triple-digit returns in the last five years. But specific stocks like Varun Beverages have been winners all along. Up over 900% during this period, as are Radico Khaitan and Tata Consumers. But ITC, despite the recent outperformance, features on the list of underperformers, as does HUL which has just not moved.

The flavour over the last 12 months has been PSUs. IRCTC and HAL are both up over 1,000% while BEL is up over 500%. The underperformers here feature oil marketing companies and ONGC.

The broader markets did well. The midcap index has nearly tripled in the last five years, with seven stocks seeing returns of over 1,000%. Fact, Dixon, and Mazagon Dock are some outperformers.

But if there are wealth creators, there are wealth destroyers, too. Paytm, Zee, Bandhan Bank, UPL – the recent Nifty exclusion.

The smallcaps underperformed their midcap peers but also surged 2.5x during Modi 2.0.

Here are the top movers – Tata Tele, JBM Auto, Titagarh and the list of underperformers features only four names. RBL Bank, City Union, Piramal Pharma, and PVR Inox.

So, it’s been a roller-coaster for the markets. The country goes to polls starting today and the markets are looking to rebound from the recent sell-off.