Top 17 BSE500 stocks turned investors wealthier this week; Will the momentum sustain?

The continued bull run in the broader market saw 17 stocks on the BSE 500 register double-digit gains last week. This has further widened the premium gap of some of the companies to the industry valuation.

The top performers were Godfrey Phillips India, JSW Energy, Mahindra CIE Automotive, Mishra Dhatu Nigam, Cochin Shipyard, and Mazagon Dock Shipbuilders, having gained 14-28 per cent this week.

Mishra Dhatu Nigam’s 12-months trailing P/E multiple is nearly 26 times compared with the industry average of 7 times.

The PSU company’s expansion plans in the defence space amid the growing opportunities in this segment has driven interest in the stock.

JSW Energy was another big mover in the midcap segment and the company’s enhanced focus on the renewable energy space has bolstered the outlook of the company. The stock’s 12-month trailing P/E is about 69 times, way way higher than the industry’s P/E of 18 times.

With several stocks in the midcap and smallcap space having seen multi-fold rise in prices, a section of the market believes that one should take calculative bets in these stocks and book profits at current levels.

Among sectoral indices, BSE Realty, Capital Goods, and Metals were the top three gainers this week, rising 3-6 per cent.

Strong domestic economic growth prospects have propelled buying into realty and capital goods stocks.

Most analysts are bullish on these two sectors and recommend accumulating quality stocks on dips.

“We advise traders to remain sanguine, and looking at the placement of the Nifty Midcap 50 index, it’s better to keep focusing on stock-specific moves,” said Sameet Chavan, chief technical and derivative analyst at Angel One.

Some experts believe that earnings will be the next big trigger and determine the trajectory for stocks.

Ahead of the earnings, there is greater volatility in stocks, and so is the case when the actual news comes out, said Dipan Mehta, director at Elixir Equities.

"So when you are so close to a particular event it is better to wait, watch, understand, analyse, see what the management has to say and then take a plunge in the stock..," he recently told ET Now.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)