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
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“As of now, Nifty is trading at a P/E close to 32x, which is almost a decade high valuation, hence, the risk-reward ratio may not be favorable. I am not a big fan of predicting numbers for the index, as we have seen in the past, at times the index remains flat, but individual stocks do very well,” says Jain of Ashika Wealth Advisors. … [Read more...] about Market cap-to-GDP ratio moves above long period average; time for caution?
Besides the Student Route, the Child Student Route for younger international students will also open from October 5. The changes form part of the Boris Johnson led government's new post-Brexit points-based immigration, which comes into force as a result of Britain's exit from the European Union and an end to the EU's free movement of people rules at the end of December. … [Read more...] about United Kingdom opens new ‘simplified’ points-based student visa route
The crisis at Yes Bank had triggered scares on the health of private-sector lenders and led to deposit withdrawals. The Reserve Bank had to step in and assure depositors, including state governments like Maharashtra that had gone public with their plans to shift money, not to do so. … [Read more...] about RBL Bank’s deposit base sees about 8% reduction in Jan-Mar
There's still scope for selective stockpicking. Even within the largecaps there are many stocks and segments which have lagged, are cheap and may pick up as the growth uncertainty fades away. Some of the themes which have traction are rural economy doing better than urban. This makes the case for segments like paints, FMCG, motorcycles, cement etc. Make-in-India theme is getting traction due to the China issue and exporters and outward-facing sectors may do better as the recovery in the US and Europe may be more immediate compared to India due to the large fiscal measures by these countries. Thus, pharmaceuticals, chemicals, IT software, auto ancillaries may do well.Value stocks may outperform growth stocks in the short-term. Segments that will remain under stress for a longer time are hotels, restaurants, malls, airlines, multiplexes, and highly discretionary spending. … [Read more...] about ‘Market looks frothy but value stocks may outperform growth ones in short term’