- Date : 31/01/2022
- Read: 3 mins
Despite the major changes the market has undergone in recent times, certain stock market sectors have managed to shine through. Here's a list:
Due to the pandemic (COVID-19), an adverse economic impact was felt across the world, with all financial market sectors taking a huge hit. Despite the pandemic subsiding in late 2020 before returning in 2021, the stock market sectors are telling a different story altogether. All of the leading indices have hit fresh all-time highs in recent weeks.
Even though most industries were severely affected, they have made tremendous strides forward. Some industries, such as IT and healthcare, outperformed others in 2021, while many others underperformed in the overall market. Read on to know about the five best performing sectors in the stock market in 2021 and gain some investment tips.
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Speaking of outperformance, metal would be one of the best sectors to invest in the Indian stock market for the long term. Since January 2021, the BSE metal index has outperformed all other indices, earning a whopping 79 per cent of its value. Tata Steel, the index's heavyweight, which has risen 120 per cent since the beginning of the year, is a significant contributor.
Close behind is APL Apollo Tubes, which has seen a 104 per cent growth in revenue since January 2021. Vedanta, JSW Steel, Hindalco, and SAIL are among the other index constituents that have gained between 80 and 93 per cent. The rise of metal stocks has been even more impressive than the stock market recovery that has occurred since March 2020.
Information Technology (IT)
The IT sector ranks second. Since the beginning of 2021, the BSE Information Technology index has climbed by 30 per cent and is one of the best sectors in 2021. In terms of market capitalisation, Majesco (436 per cent), Happiest Minds Technologies (324 per cent), and Brightcom Group (318 per cent) have outperformed by a wide margin among the index’s 51 participants. Wipro gained 54 per cent in value among the large IT stocks, while Mindtree gained 69 per cent. In the last year, the market value of TCS and Infosys climbed by 32 per cent and 13 per cent, respectively.
The benchmark S&P BSE Sensex Index has increased by around 19 per cent year-to-date, while the BSE real estate index increased by 51.38 per cent. Several companies saw their stock prices rise due to the low interest rates on home loans offered by both public and private lenders in the country.
India is currently the world's third-largest energy consumer, after the US and China. With the increasing demand for electricity, the power sector has remained one of India's most successful industries and among the best sectors to invest in, and this trend is expected to continue. Furthermore, the government’s decision to allow 100 per cent Foreign Direct Investment (FDI) in the power industry has given it an additional boost by facilitating the admission of multinational businesses.
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As was seen last year, the healthcare business continues to be at the forefront of public attention, displaying remarkable resilience in difficult times. The BSE healthcare index has climbed by 21 per cent since January 2021. Approximately one-seventh of the index’s constituent stocks have performed significantly better than the index overall. Hikal is the top performing contributor, accounting for a 275 per cent increase. Thanks to a 102 per cent gain in its stock price, Max Healthcare is in second place.
Disclaimer: This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.