BackMarket giving up hopes of quick investment revival
Sectors such as realty, banking and capital goods have struggled on realization the recovery is going to be slow and the return of investment demand is some time away
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The chart shows that healthcare and information technology (IT) have led market gains since the new government assumed power in May. While the BSE Sensex has gained 10.1% since then, a defensive sector like healthcare and an export-oriented one like IT, which have little to do with a pick-up in the domestic economy, have gained the most. Among sectors linked to the domestic economy, auto stocks have done well, as replacement demand has kicked in. Sectors such as realty, banking and capital goods, which do well during an economic recovery, have struggled on the realization that the recovery is going to be slow and the return of investment demand is still some time away.
In fact, the BSE Capital Goods index is lower by 15% than the heights it reached in early July, while the Realty index is down a huge 30% from its peak in early June, soon after the new government took over.
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