The domestic equity market witnessed a tumultuous Calendar Year 2018, even as stocks ended on a rather dull note for last session. Throughout year, NSE benchmark Nifty remained affected by events, both global and domestic.

They included threats of a trade war, US Fed continuing to hike interest rates, sharp spikes in crude oil prices followed by equally sharp declines, volatile rupee, regional conflicts in Asia Pacific with tensions escalating between US and North Korea, State Elections in India and sudden resignation of RBI Governor, which was seen as an action of protest against increasing government interference. Because of all these factors, market in general remained immensely volatile.

The Nifty, which had once gained over 12 per cent on a YtD basis, settled with a return of just 3.15 per cet. The sector analysis as at end of year does not paint a pretty picture.

Out of 18 sectors under review, 13 ended with losses, 1 remained flat, while only 5 sectors reported gains. If we shift our analysis from pictorial view to actual figures, table shown above throws up interesting insights. It shows that Nifty Realty, Media and Auto indices remained top three under-performers, as they lost 33.02 per cent, 25.92 per cent and 23.10, respectively on a YtD basis. On hand, Nifty IT, FMCG and financial services performed best gaining 23.78 per cent, 13.65 per cent and 10.60 per cent, respectively. As we step into 2019, we must remember that coming year is likely to remain extremely stock specific in nature.

Volatility is likely to remain an integral part of trade as we face general elections. The above two charts show Relative Strength (RS) of various sectoroal indexes against broader market -- CNX500. These sectors are likely to relatively out perform general market and will help investors give a resilient start to New Year. As evident, Consumption, IT, FMCG, Financial Services and Bank Nifty packs are in continuing uptrend as RS is seen in a firm uptrend. The RS line is also seen above its 50-week MA, which acts as further confirmation of continuing out-performance. Apart from this, Pharma, Infrastructure and PSU Banks are see ending their long-term downtrend, flattening trajectory and reversing trend.

All these sectors, collectively, are likely to perform much better when benchmarked against broader market, and are set to offer resilient relative outperformance in 2019. (Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara.

He can be reached at This email address is being protected from spambots.

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