Real estate and infrastructure stocks lead Indian equity market gains in 2023
Adani Group companies — the heavy hitters of 2022 — are mostly finishing with losses despite a rebound in recent months. As the benchmark S&P BSE Sensex Index heads for an eighth year of gains with returns of 17% in 2023, expectations that the party led by Prime Minister Narendra Modi will win elections in 2024 are raising hopes this bull run may continue. Global funds have bought more than $20 billion of local shares in 2023, after taking out $17 billion last year, signaling investors’ preference for India as China grapples with an economic slowdown.
Here’s a look at some of the significant stock moves of 2023: A measure of real estate stocks rallied to its highest level since 2008, outpacing all other sector indexes managed by the BSE Ltd. A pause in interest-rate hikes, demand for luxury housing and investments by Indians living abroad boosted developers. Prestige Estates Projects Ltd.
surged about 140%, while DLF Ltd. almost doubled. “A combination of a strong pent-up demand for housing, above average affordability and 12-year low unsold inventory should drive a multi-year virtuous housing cycle," according to a Jefferies note this month.
Engineering behemoth Larsen & Toubro Ltd. and UltraTech Cement Ltd. ranked among the top performers on the benchmark gauge, underscoring the focus on building infrastructure in the world’s most populous nation.
“Cement is a good way to play real estate and infrastructure sectors in India and it can do well in 2024," said Arun Malhotra, a fund manager with CapGrow Capital Advisors LLP. “We have seen real estate activity remaining firm and companies getting strong bookings for projects." State-owned firms had their best year since 2009 as the government ramped up spending. While NTPC
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