“Investors can remain on the sidelines and wait and watch till the arrival of the monsoon,” Said Nirali Shah.
Investors can remain on the sidelines and wait and watch till the arrival of monsoon, but it would also be a good time to look at investments in gold from a portfolio allocation standpoint, Nirali Shah, Head of Equity Research, Samco Securities said in an interview with Moneycontrol’s Kshitij Anand.
Q: Bulls got their grip back on D-Street pushing benchmark indices higher. Nifty50 closed above 15000 levels for the week ended May 21. What led to the price action in the volatile week gone by?
A: Market has witnessed a volatile week with its ups and downs especially since the WPI inflation numbers hit their 11-year high at 10.49% for April.
While higher inflation raised some concern, the near-term impact was effectively neutralized by the reducing number of COVID-19 cases in India. Besides, positive Asian market cues helped Nifty push past 15100 levels.
Q: Small & Midcaps remained resilient in the week gone by. What is supporting the prices?
A: Small & Midcaps have remained resilient due to several reasons such as confidence in the local demand due to declining COVID cases, being relatively cheaper than large caps in terms of valuation, earnings growth causing a re-rating in its stock price, and continued foreign inflows in some sectors.
Quality small and midcap companies still have some fuel left in them and there is every likelihood they outperform large caps in the longer run.
Q: Where do you see markets in the final leg of May which is also the expiry week? Where do you see the expiry for the May series?
A: Although Nifty has broken its previous short-term resistance and seems to be coming out of the consolidation range, it still trades below the major rising channel.
A decisive break above 15200 could create more room for upside for the index. Till then, we maintain a sideways to mild bullish outlook with immediate support at 14900.
Q: The BSE Realty, and Power indices rose over 5% each in the week. What led to the price action?
A: BSE Realty and Power indices have been correcting and consolidating over the past few weeks. The price action this week was more of a catch-up rally for these indices.
Besides this week, Indiabulls Housing Finance reported a robust Q4 earnings result with positive commentary, pushing the realty stock prices higher.
Consumer trend throughout Q4 was very encouraging and sales were at a lifetime high with a positive outlook going forward. Realty stocks could also pose as a decent hedge against inflation which could have fuelled investments in these stocks amidst rising inflation fears.
Q: What are your trading bets for the short to medium term?
A: Investors can remain on the sidelines and wait and watch till the arrival of the monsoon. It would also be a good time to look at investments in gold from a portfolio allocation standpoint.
The most ideal way for retail investors to invest in gold would be to lap up the current sovereign gold bonds in the market which also have a decent interest component attached.
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