Open up to Opportunities Ahead
While there are concerns over inflation rearing its ugly head or the rapid increase in new corona virus cases, the Sensex has once again nudged over 51,000, this time spurred by the announcement of the new US stimulus. In the fortnight gone by, the broader markets outperformed the key benchmark index by a good margin. BSE Small-Cap index recorded gains of more than 6 per cent while BSE Mid-Cap index was up by more than 3 per cent at a time when the Sensex strengthened by 1.39 per cent. With about 70 stocks more than doubling in 2021 so far and as many as 723 stocks gaining more than 25 per cent, we can say that the market is holding the fort.
However, it appears that all the positives have been factored into the market indices with just a little upside left. We believe, going forward, Sensex and Nifty are likely to head into a consolidation phase and provide further opportunities for investors to park their funds, as stated in my previous editorial. The ample liquidity and inflation concerns are likely to keep the commodity prices firm in 2021. In our cover story we have explained why the commodity stocks are a portfolio ‘must have’ for 2021 supported by reasons on why the commodity stocks may outperform this year.
There are talks in the analyst circles that certain sectors are being re-rated by the markets. We thought it an opportune time to introduce the topic of re-rating, what it means and identify the sectors that are being re-rated by covering it in our special report. In another special story of ours, we have analysed the prospects of the FMCG sector and have shared our detailed view on FMCG stocks. Long-term investors will find ample opportunities to invest in the coming days.
Also, if we look at the basket of BSE 500 stocks, there are at least 10 stocks with dividend yield greater than 10 per cent. If anyone is looking for returns greater than fixed deposits then there are at least 32 stocks within the basket of BSE 500 with dividend yield greater than 7 per cent. So, while there are some opportunities for capital appreciation one can ensure base returns of more than the fixed deposit rate. Remember, quality matters and you will be rewarded for your stock-picking skills in the long run. Happy investing!
RAJESH V PADODE
Managing Director & Editor