Deepak Jasani, head of retail research at HDFC Securities, shared his views on stock markets with NDTV Profit
The Sensex touched the psychological 32,000 mark on July 13 aided by expectations of a rate cut (post the low CPI and IIP numbers announced on July 12), good monsoons and overcoming the fears of disruption due to introduction of GST. The latest 1,000 point rally in the Sensex was driven by Reliance Industries, large Pharma stocks, Bharti Airtel, ITC and Maruti. Unlike in the past, Banks & IT stocks did not contribute meaningfully to the latest rise. Local fund and non-fund inflows contributed to this rise.
The rise in the markets has been aided by the risk-on sentiments prevailing across the globe. Valuations look stretched going by historical parameters; however some more upside is possible in the coming few weeks.
Retail investors may use this rise to reweight their broad asset allocation, relook at the stocks that they own and clean/shrink their bulging portfolios of stocks. They may avoid chasing stocks that are at steep valuations but keep hunting for opportunities in the small/midcap space where promoters show genuine interest in improving shareholder value by restructuring their businesses/companies. For investors who are under-invested in stocks, SIP in select equity stocks may be looked at.