Be extremely careful about the kind of trades that you enter right now. There is a temptation to look at the Nifty at all-time high. It is hiding a lot of things.
For investors, the best practice would be to look at bottom-up stories.
The market is likely to remain volatile amid escalating geopolitical tensions. However, the long-term structural story remains intact and investors should use dips to buy into quality stocks.
The midcap index has been down for the last four days. The index is down in excess of about 4 percent in the last four days versus the Nifty and the Sensex which is down close to about 0.8 percent.
S Krishna Kumar, CIO-Equity, Sundaram MF said that fund managers are moving away from high-quality high growth companies to cyclical growth companies.
The premium has expanded on a month-on-month basis for the third consecutive month, according to a report. In FY17, mid-caps have delivered 35 percent positive returns compared to 19 percent by the Nifty50, Motilal Oswal said in a report.
One should look for turnaround companies that have focus on quality available at aggressive valuations, said Ayaz Motiwala, Senior Fund Manager at Nivalis Partners.
The valuation of India markets look reasonable on a top-down basis but the valuations of individual stocks are super-expensive or fairly valued in most cases, Kotak Institutional Equities said in a report.
Prasad of Kotak Institutional Equities also felt NBFCs could see some pressure as banks will look to capture retail customers. He prefers Aurobindo Pharma and IOC as valuations look reasonable and cheaper than peers.
The S&P BSE Sensex might not have gone anywhere but a lot has changed since then. The political climate, as well as economic positioning, is very different than what it was back in the year 2015 which makes this rally more authentic.
The highlight of the year has been the performance of midcaps and small cap indices, which gave stellar returns. The NSE’s midcap index gained a significant 33 percent during the fiscal, while the exchange’s Smallcap index registered a gain of whopping 40 percent.
Dipen Sheth of HDFC Securities recommends looking for fundamentally strong stocks, even if it means looking outside the index ones. He is upbeat on Repco Home Finance and TeamLease Services.
Sudarshan Sukhani of s2analytics.com is of the view that one can buy Oil India Limited and Tata Global Beverage and advises selling Ceat.
Speaking to CNBC-TV18 Udayan Mukherjee said that while the market is trying to price in the gravity of the moves over the last couple of weeks, participants don‘t know which way the cookie is going to crumble. Right now, there is hope the market has discounted the worst, but it could change, he said.
Indiabulls Housing, Shriram Transport, Oberoi Realty, Reliance Capital and Reliance Communications are major losers among BSE Midcap indices. Stocks those are in green among BSE Smallcap indices are VA Tech Wabag, Swan Energy, Ujaas Energy, Orbit Exports and Accelya Kale.
Factors such as GST structure and its implementation will centre the focus of the market to midcap segment and the segment will remain more constructive despite a valuation gap between midcap and large cap stocks, said Nitin Jain, Principal Investment Manager at Kotak UK.
Midcaps rose about 22 percent on average last year. But for a lot of investors, it wouldn't felt like a bull market.
The 50-share index was down 135.45 points or 1.6 percent at 8573.3 while the Sensex slipped 439.23 points or 1.6 percent at 27643.11.
Stating that there was "clear and present" danger of a correction in stocks, veteran financial commentator Udayan Mukherjee said a 10 percent downtick could be on the cards.
Midcaps continue to do well, outperforming the market by nearly 15 percent over the past year, says Surendra Goyal of Citi, adding while domestic fund flows have indeed helped, even FII ownership continues to rise in midcaps.
In an interview with CNBC-TV18, Pankaj Tibrewal, Fund Manager with Kotak Asset Management Company, explained why it makes sense to invest in companies that benefit from rise in discretionary and government spending, and said that sound stocks should be held in spite of seemingly rich valuations.
SBI, BHEL, Tata Steel, HUL and Cipla were top gainers while Coal India, TCS, Lupin, Sun Pharma and M&M were losers in the Sensex.
The bulls were back in form Thursday after two days of losses. Global markets were higher after minutes of Federal Reserve meet were released. Bank stocks led the charge ending 1.6 percent higher as the Bank Nifty closed at a new 52-week high.
When the market has been rising for a while, valuations turn expensive. Frontline stocks may look a safer bet, but much of the action would be happening in midcaps.
Midcaps are often overlooked by large investors and FIIs. Investments in midcaps are often considered risky as they are prone to volatility, but that's where the money has been made. Prakash Diwan, SP Tulsian, Ambareesh Baliga, Deven Choksey give their picks.