"Sticky CPI inflation at nearly 6.5 percent and a sharp increase in fiscal deficit outlook have resulted in the 10-year bond yield remaining relatively high despite the rate cuts and liquidity measures by RBI. Inflation, as measured by WPI, is currently is sharply lower as it was post-GFC when it represented the headline inflation number instead of the CPI post-2012," ICICI Securities said. … [Read more...] about COVID-19, marginal dip in discount rate may deflate the current bull market: ICICI Securities
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The Nifty50 has gone back to its February 2020 levels but in the absence of earnings and aggressive retail participation (ie on the back of left out feeling), valuations have gone through the roof. Between February 2020 and now, we have seen a swing in GDP forecast for FY21 from +5.5 percent to -5.8 percent. In February, we were projecting FY21 Nifty50 EPS to be around Rs 670 which now stands at around Rs 457 (a downgrade of 32 percent within six months). … [Read more...] about ‘More MF outflows seen if market keeps rising; BFSI stocks can outperform in next one year’
The key drivers for the market are the flood of global liquidity, near-zero interest rates and massive fiscal stimulus in the developed world. The way markets and all asset classes have moved up in the past 3 months, it is clear that markets are expecting a continuation of these policies. With such liquidity flooding markets, it gives us the luxury to look beyond the immediate future i.e. FY21 and focus beyond i.e. FY22. If the economy recovers back next year, then profit growth will be sharp and valuations based on expected FY22 earnings may be justified to some extent. … [Read more...] about DAILY VOICE: Valuations of largecaps & polarization of market into top 10-20 stocks are biggest risks, says Mihir Vora of Max Life
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine. … [Read more...] about Market cap-to-GDP ratio moves above long period average; time for caution?
“Correction shall get accelerated further going forward if index dips below 11250 levels with initial targets of 11100. Meanwhile, 11450 is emerging as a critical short term resistance point,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol. … [Read more...] about After The Bell: Market ends flat; here’s what investors should do on Wednesday