History suggests real estate, metals & IT stocks gain big in Decembers. Here’re top stock picks

Real estate, metals, IT and power stocks delivered strong returns in the month of December historically, as suggested by past returns of their sectoral benchmark indices. These sectors have managed to deliver positive returns in 70-80 per cent of the times since 2008.

In the case of BSE Realty, the index delivered an average of 4.91 per cent return in Decembers, with the real estate barometer ending higher in 71 per cent of the times since 2008. The index delivered a maximum turn of 45.68 per cent in the month and has fallen a maximum of 12.44 per cent.

The BSE Metal index closed the month higher in 79 per cent of the times, with an average return of 4.83 per cent. This index delivered a maximum return of 18.96 per cent and has fallen a maximum of 9.11 per cent for December.

The BSE IT index comes third with an average return of 3.17 per cent. This index ended higher in 71 per cent of Decembers since 2008. This index logged its best December gains at 11.99 per cent gains and worst at 9.11 per cent since 2008.  For Power, the average return stands at 2.04 per cent. This index has risen 79 per cent of the times, an Axis Securities’ monthly technical analysis on sectors revealed.

On evaluating sectoral rotation data, Axis Securities said “IT has moved into the “Improving Quadrant” which indicates sentiment may turn bullish. Metal entered in the “Leading Quadrant” and is expected to outperform Sensex.”

In case of the BSE Realty, Axis said the index is in strong up trend on a long term frame however on the short term time frame the index continues  to consolidate within 3,900-3,000 levels and decisive breakout above 3,900 levels may cause continuation of uptrend  towards 4200-4500 levels. On the flip side, an immediate support zone is placed around 3,400-3,300 levels, it said.

The brokerage is bullish on Phoenix Mills, DLF, Prestige Estates and Oberoi Realty and is neutral on Sobha, Brigade, Indiabulls Real Estate, Lodha (Macrotech Developers) , Sunteck and Godrej Properties.

Among metals stocks, it is positive on Coal India, Welspun Corp and Ratnamani Metals, while it remains neutral on SAIL, Tata Steel, Hindustan Zinc, Hindalco, Vedanta, Jindal Steel, JSW Steel and Hindustan Copper among others.

Among power stocks, it likes Adani Power, NTPC, NHPC, ABB, Thermax and Siemens while it stayed neutral on BHEL, Tata Power, PTC, Torrent Power, CESC, Kalpataru Power, Adani Transmission and Power Grid.

In the IT pack, the brokerage is bullish only on KPIT Tech. It is neutral on Coforge, HCL Tech, Mphasis, Infosys, Wipro, Tata Elxsi, Mindtree, TCS, LTIMindtree and Tech Mahindra among others.

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