2023 Review. Oil & Gas, Metals, Private Banks amongst key sectoral laggards this year. Underperform Nifty-50 gains
While benchmark indices Nifty-50 and Sensex have given strong returns of around 17.5 to 18.5% during the calendar year 2023 till date, the key sectoral indexes that have underperformed the benchmark indices include Metal, Private Bank, Bank and Financial Services as well as Oil & Gas index.
Nifty metals has seen gains of around 14.5% while Nifty Banks, Nifty Financials, Nifty Banks have gained 11-13.5%. The biggest laggard has been Nifty oil & Gas index that is up just 9.37%
The oil and gas sector has been impacted by volatility in the crude prices. The voluntary production cuts undertaken by OPEC + (organization of [petroleum exporting countries) had led to Brent Crude rising to close to $100 a barrel by September. The Rising US oil production and concerns on demand however led Brent crude dripping by end of the year.
Also Read- Outlook 2024: How equities, gold and crude oil will perform next year
The Petrochemical prices too have remained volatile and unfavorable for petchem producers as concerns on rising supplies from China have dampened prospects. The refining margins too have remained volatile.
Overall the key heavyweights such as Reliance Industries have not seen any major uptick in stock prices during 2023 and this also has weighed on Oil & Gas index performance.
The Oil marketing companies have done well during 2023 with a record rise in marketing and refining profits. The City Gas distributors however faced volume growth constraints.
In the meanwhile, the base metal and steel prices have not supported performance of Metal companies. The opening up of China economy post easing of covid restriction at the start of 2023 while was looked at with optimism, pick up in China demand disappointed. Global recession concerns also weighed on metal prices leading to underperformance by the metal stocks.
Also Read- Nippon Life India Asset Management share price rises almost 9% on large trade deal news, scales 52 week highs
In the Banking space while PSU banks outperformed the Private Bank Index underperformed the Nifty 50 index gains. Experts are of the view that Private Banks already had seen good run. Also generally large caps have not participated much in the recent rally and so there has been underperformance by private banks. The heavy weighs as HDFC Bank also did not participate in the rally earlier as concerns had remained elevated on HDFC Bank and the HDFC Ltd merger, leading to some impact on margins’
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
Download The Mint News App to get Daily Market Updates.
Published: 20 Dec 2023, 02:38 PM IST
