Quote on Morning market 20 October 2021 By Dr. V K Vijayakumar, Geojit Financial
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Below is quote on Morning market 20 October 2021 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
"After the 1000 point rally in Nifty in ten trading sessions the market is showing signs of high volatility in the days ahead. There is excessive speculation in certain stocks, particularly in the broader market, which have taken some stocks to unjustifiable levels of valuations. PEs in some cases are 100, 150 and even above 200. The high level of speculative froth in many stocks is evident from the abnormal trading volumes and huge volatility in these stocks. For instance, IRCTC had trading volume of Rs 9083 cr yesterday and a price correction of around 15% from the peak. Many broader market stocks witnessed corrections of above 5%.
Massive selling (Rs 2578 cr yesterday) by DIIs indicates that smart money regards markets as overvalued and overheated. The market direction will depend on whether the exuberant retail investors will again rush in to absorb the selling by institutions.
At the present juncture, safety is in high-quality large-caps. The fact that high-quality stocks like HDFC twins, RIL, Infosys, L&T, Kotak Bank and some others were resilient during the crash in the broader market indicates the zone of safety for investors. Traders in the broader market are likely to face stormy weather in the coming days"
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