HCLTech To Trent: Six Nifty Stocks Bucking Market's Correction Mode
Tech Mahindra, Trent, Infosys, HCLTech, Kotak Mahindra Bank and HDFC Life Insurance shares have gained even as 40% of the Nifty stocks have entered correction.
While the Nifty 50 is still trading 15% higher on annual basis, the benchmark is down over 4% since it hit an all-time high of 26,277.35 on Sept. 27.
As per data collated by NDTV Profit, nearly 40% of Nifty 50 counters are in correction mode. Against this backdrop, six stocks that have gained in the past two weeks stand out.
Stocks That Gained
As per data collated by NDTV Profit, the six stocks that gained are Tech Mahindra Ltd., Trent Ltd., Infosys Ltd., HCLTech Ltd., Kotak Mahindra Bank Ltd. and HDFC Life Insurance Co.
Tech Mahindra and Trent have gained the most at over 4.7% and 3.7%, respectively. Tech Mahindra has a 0.95% weightage on the benchmark, while newly added Trent has a 1.6% weightage.
What's Driving These Stocks Up
Three of the six gainers belong to the IT space—Tech Mahindra, Infosys and HCLTech. The positive momentum in these stocks can be attributed to players seeing a more stable demand environment, as mentioned in the first-quarter result commentary. Another factor was the Fed rate cut, which gives room for more IT spends by clients. This is a positive as most clients of IT companies are US-based.
New constituent Trent was added to the benchmark on Sept. 27. The company has many growth levers—good growth in the make-up segment, its shift to the luxury segment, as well as a foray into lab-grown diamonds. The company has also seen some positive brokerage views over the past two weeks.
HDFC Life Insurance continues to see strong top-line growth, while Kotak Mahindra's current price-to-book ratio is trading at a heavy discount to its five-year historical average.
Stocks That Have Dragged The Nifty
As per data collated by NDTV Profit, many of the index heavyweights have already entered correction mode. Nearly 20 stocks have corrected 10%, with five stocks correcting more than 15% from their 52-week highs.
The top five lagging stocks include Reliance Industries Ltd., Nestle India Ltd., Axis Bank Ltd., Titan Co. and SBI Life Insurance Co.
Reliance Industries, which has over an 8% weightage on the benchmark, has corrected over 10% since Sept. 27. Uptick in oil prices as well as muted second quarter results are some of the key things that have impacted the stock.
The downtrend in Nestle India could be attributed to the entire fast-moving and consumer goods sector being under pressure recently.
For Titan, while the company clocked a growth of 25% in the second quarter, the uptick was on account of higher gold prices rather than an actual increase in volumes. Additionally, Q2 saw a weaker studded mix, which could impact the company's overall margins. Additionally, Trent's foray into lab grown diamonds could dent its overall sales of natural diamonds.
