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Last Updated : Dec 04, 2019 11:16 AM IST | Source: Moneycontrol.com

Portfolio play! Smallcap and midcap likely to outperform on signs of revival in growth

The broader market started to outperform due to buying in some beaten-down financial stocks because there are many signs that worst is over for the NBFC sector.


There is a need for some growth signs for overall smallcap and midcap space to outperform because growth is the main factor for the broader market while large-cap stocks may continue to do well because of global liquidity, Amit Gupta, Co-Founder, and CEO, TradingBells, said in an interview with Moneycontrol’s Kshitij Anand.

Q) It was a historic week for Indian markets as Nifty50 and Sensex both touched fresh record highs, but then we saw the momentum cooling off thanks to muted global cues. Do you think the momentum will sustain?

A) The market is in a bullish momentum and is likely to continue with one step backward and two steps forward texture where buy on dip strategy will continue to reward traders as long as Nifty trades above 12,000-11,950 support zone.

Close

A move below 11,950, we can expect short-term weakness towards 11,800/11,700 levels. On the upside, 12,350-12,500 are immediate target levels in December while the market could surprise with even higher levels as Bulls are on the driver's seat.

Bank Nifty is the leader of the current bull run, and it may continue its leadership position where we can see 33,500 level in the Banknifty in the near term.

Q) The GDP data for the September quarter came below expectations. What should be the investors’ strategy?

A) The GDP data is expected to remain subdued where a figure of 4.5 percent is already discounted by the market while a figure around 4 percent might create immediate pressure in the market.

Any dip due to weak data will be a good buying opportunity as the market will bet on more rate cuts and more economic reforms by the government.

Q) The broader market did outperform in the week gone by. Do you think that the smart money has now started chasing beaten down small- and mid-caps?

A) The broader market started to outperform due to buying in some beaten-down financial stocks because there are many signs that the worst is over for the NBFC sector, and the government has a continuous focus on Infra and real estate sector.

There is a need for some growth signs for overall smallcap and midcap space to outperform because growth is the main factor for the broader market while large-cap stocks may continue to do well because of global liquidity.

Q) What should be the investment strategy for December; especially at a time when markets are trading near record-highs?

A) Investors and traders should continue with a ‘buy on dip’ strategy because the overall trend of the market remains bullish.

Investors can continue with large-cap stocks especially FIIs favorite stocks where growth visibility is still there while some quality midcap stocks also should be added into the portfolio where valuations are attractive.

Investors should also focus on good stocks where there is turnaround is visible. For example, in the last few days, many NBFCs and PSU Banks witnessed handsome returns as there are signs of a turnaround.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Dec 4, 2019 10:44 am
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