Sectoral indices: BSE CG and Teck index outperform Sensex

Mumbai, Dec 29 | Updated: Dec 30 2006, 05:30am hrs
Dalal Street has been witness to a major rollacoaster ride this calendar year as the equity markets staged an impressive come-back from a massive fall in May this year, only to bounce back sharply, and breaching new peaks, gaining 46% since January.

Interestingly, of all the BSE sectoral indices, only BSE Capital Goods (CG) index and BSE Teck index were able to outperform the benchmark Sensex by a wide margin, by registering a gain of nearly 56% and 50% respectively. All other BSE sectoral indices have been underperformers, when compared with the Sensex.

The companies under the Teck sector has come out with good quarterly numbers and hence are in great demand with the investors, said Amitabh Chakraborty, Head-Research, Brics PCG said.

The BSE Capital Goods index has gained an impressive 3,273.51 points or 56.21% in the current calendar year. On Friday, December 29, 2006, the index closed at 9,090.19. On the other hand, BSE Teck index gained 1,220.81 points or 50.24% to close the last trading session of the year at 3,650.63 points.

Analysts are of the opinion that as the economy is in an expansion mode, there is a great demand for the capital goods equipment, which has boosted the investor sentiment in companies in this sector. Also, frontline companies have bagged major export orders that has helped the sector to perform better.

Touching New Heights

All other BSE sectoral indices have been underperformers, when compared with the Sensex
The BSE CG index has gained a remarkable 3,273.51 points in the current fiscal
Analysts believe there is a great demand for capital goods equipment

The Capex hike in general, has had a positive sentiment towards this sector, which had helped the capital goods companies have a very healthy order book.

Manish Sonthalia, VP, Market Strategist, Motilal Oswal Securities said, The Teck companies have a clear visibility for next two years which has helped them in a major way. However, the rupee-dollar fluctuation will have a bearing on these companies in the coming days. Also, the capital goods companies with their strong order book volume has been able to register good performance. Still, the rising interest rate scenario would be a dampener for the capital goods sector.

BSE Bankex (up 38%), BSE IT (up 41%) and BSE Metal (up 38%) have also gained sizeable ground in CY06, but failed to outpace the Sensex.. On the other hand, BSE Consumer Durables index has been the worst performer with a gain of only 8.4%.