IGI Logo

Quote on Sensex at all-time high By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

An important trend in the market is the surge in retail investor participation as indicated by the sharp increase in new demat accounts ( 2.36 million) opened in June. New retail investors jumping on to the market band wagon normally happens at the peak of a rally. This is a sign for caution.

The FPI liquidity driven rally is showing signs of losing steam. Some of the leading indicators like credit growth for Q1 from banking majors like the merged entity HDFC Bank indicate a possible slowdown in the economy. Two-wheeler sales in June indicate that demand continues to be a problem in rural areas. In brief, the macroeconomic scenario, though good, is not so bullish as to warrant continuation of the rally, which has already run a bit ahead of fundamentals.
Investors should not chase low-grade small-cap stocks at this juncture. Stay invested in high quality large-caps. Wait for the Q1 results for direction.

Above views are of the author and not of the website kindly read disclaimer