Last year was a year of hope. Amid Modi's wit and charm, India’s economy was expected to return to its days of high octane growth. While everything on the Street was making money in FY15, one sectoral index rose above the rest – S&P BSE Consumer Durables. The index returned 60%. The only exception was healthcare which returned 71%.
Cut to FY16, the market sentiment has changed. Capex revival seems far away, while weak demand has put corporate balance-sheets under stress. Defensives like FMCG, IT and pharma are also facing headwinds from certain sector-specific factors like weak rural demand, growth saturation in US generic drug market and pricing pressure in the IT sector. Of the 11 BSE sectoral indices, eight have given negative returns in the range of 5% and 34% while the Sensex has corrected 8%.
But one thing hasn’t changed: the love for consumer durables. Even as bearish sentiment has taken over most of the market, the BSE Consumer Durables index has once again outperformed with year-to-date gains of about 16%. What is it about this sector that has been attracting investor interest? More importantly, can this defiance continue?
For starters, some experts are of the view that the under-pene