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Below is Quote on 4-month high from lows by Kedar Kadam, Director – Listed Investments, Waterfield Advisors

"Despite uncertain economic outlook, the global equity markets staged a smart comeback driven by better-than-expected Q2’CY22 earnings in US stocks and buying from set of investors positioning for an economic recovery rather than worrying about the potential for a recession. The US benchmark S&P 500 has rebounded about 15% since mid-June, halving its year-to-date loss, and the tech-heavy Nasdaq Composite is up more than 20%. Following these positive global cues domestic equity markets too staged a strong come back, with benchmark Nifty-50 gaining more than 15% from the lows in June-22 . The return of FII buying, flattening of inflation, softening commodity prices and good monsoon boosted investors sentiments. The encouraging macro readings (IIP up ~20%, GST collection, Rs1.44 lakh cr up 55.8%, moderating inflation 6.7%) and sound fundamentals are giving markets new-found hope despite fluctuations. The benchmark Nifty-50 has added over 2,500 points since lows in June. This sharp rally has pushed the valuation multiples near LT averages (20x+) which in our view makes risk reward less attractive amid uncertain global economic outlook and rising geopolitical tensions. While the domestic economy & earnings have showcased strong resilience, we remain caution at current valuations & suggest a staggered buying approach. Our stance is driven by A) Indian economy cannot stay fully immune to any global economic/ geopolitical shocks B) Inflation trajectory continue to remain elevated C) Global & domestic monetary policy tightening to continue D) The trend in domestic demand recovery not yet broad-based E) In case of a recession reality, the earnings in select sectors could take a major hit"

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