Fairval

Notes on Indian equities, sectors and economy

2010 was a good year for Indian equities

Posted by fairval on January 5, 2011

Year of the Monkey

2010 ended up a very good year for Indian equities. Not only did the headline indices record decent gains, what is more important is the advance – decline ratio for the year. Check some data:

Index Gains (%)

Sensex 17.6
Nifty 18.0
BSE Midcap 16.5
BSE500 19.3

Advances

Gains>0 62.0
Gains>15% 50.0

So 50% of traded stocks (we took companies with mcap > Rs 100 crore) gained more than 15%. It is hard to lose money in markets like that.  You could call 2010 the year of the monkey – You could throw a dart and make money.

2011 – Year of the Owl?

I doubt market may have this kind of breadth in 2011. This kind of breadth happens only in strong bull markets. For 2011, expect the number of companies gaining >15% to fall to 35% or less. So 2011 may well be the year of the wise owl – one will need to stock picking skills to make money in 2011.


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