Investors should exercise caution chasing small-cap stocks Liquidity can drive markets higher - Says Dr. V K Vijayakumar, Geojit Financial Services
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Quote On Morning Market 12 July 2023 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
Even after the recent run up in markets, sentiments are clearly bullish. Global and domestic cues are positive. If the US CPI data expected late today indicates YoY inflation dipping below 3%, the US market will rally further lifting other markets, too. So, watch out for this data which can throw light on the Fed rate action on 26th July.
There are signs of overheating in the small-cap space. Some leading mutual funds in the small-cap segment have stopped fresh lump sum investment in their schemes. This is an indication of froth building in this space. Investors should exercise caution chasing small-cap stocks. Liquidity can drive markets higher. So it makes sense to remain invested in this market. But optimism has to be tempered with some caution.
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