The barometer index, the BSE Sensex logged a modest 147 points gain to settle at 38,389 on the last trading day of the week. Index heavyweights such as Reliance Industries, Mahindra & Mahindra and ICICI Bank were a few of the major contributors to the rise of the Sensex. The market breadth, which indicates the overall health of the market, was quite positive with 1,533 stocks in the positive territory. Brokers expect markets to be range bound next week with Reliance Industries trying to touch the Rs 1,300 mark.

After a decade of slump, the global economy has been showing signs of a possible recovery. This has been reflected in the revival of investment in a few sectors, particularly in the developing world. There has been a minor uptick in the manufacturing sector amid signs of favourable global financial conditions, accommodative policies, positive business sentiment and firm commodity prices. Mirroring this uptrend, the global GDP growth has picked up from 3.2% in 2016 to around 3.8% in 2017. Emerging markets and developing economies led the GDP growth in 2017 at 4.8%, while the advanced economies inched up at 2.3%. Oil dependant economies also posted better financial numbers on the back of firming oil prices. On the domestic front, India’s economic growth did get affected by the process of demonetisation and the initial challenges on account of GST implementation. But in the long term, both these initiatives should propel Indian economic growth above the 8% plus levels. A clean up of the banking balance sheets should also pave the way for economic stability in the long term. Investment revival is currently being seen in the consumption led sector (particularly in FMCG) with addition of fresh capacity utilisation. Therefore, FMCG stocks are touching new highs every day on the back of higher margin and profit reporting. Though there has been a healthy order intake in the capital goods sector, the market is viewing this recovery with cautious optimism. In the capital goods sector, Thermax Ltd stands out as an outstanding company with excellent corporate governance. It is a leading energy and environment solutions provider in the area of power, water and waste management, air pollution control, cooking and heating sectors. There has been a sharp rise in air pollution in major cities due to polluting automobiles and hence the Petroleum and Natural Gas Ministry is introducing new fuel norms for reducing pollution. Similarly, the oil refineries are also upgrading their facilities with new emission norms by 2020. Thermax can look forward to increasing opportunities to come its way on the back of new orders. The Thermax stock quoting at Rs 1,000 on the exchanges can be bought for portfolio investment. Analysts and brokers expect the earnings per share for FY19 and FY20 to be 22.40 and 25.20 respectively and therefore the stock can deliver a 20% upside from the present levels in the next one year.

Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.

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