DSIJ Mindshare

Action In Mid-caps and Small-caps Make Large-caps Look Dull

Markets look to be in a consolidation mood and have retraced nicely by about 1,000 odd points from Sensex’s all-time high level at 33,865, which was made on November 7, 2017. In the short run, the Gujarat elections and RBI policy decision are keeping markets on the tenterhooks, while on a slightly longer time horizon, investors remain concerned on rising crude oil prices and weak industrial credit growth. On the positive side, in long run, the global growth, improving capex in India, infrastructure spending, other fiscal spending and increasing consumption domestically all indicate towards higher growth for the Indian economy and that’s charmingly reassuring for equity markets in India.

 In terms of liquidity, the month of November saw FPI inflows to the tune of US$ 3 bn, marking an eight-month high, which also includes US$ 1.5 bn in the primary market. With liquidity in Indian markets showing no signs of abating and the macroeconomic fundamentals still in place, there is absolutely nothing to worry for the long-term investors. Needless to point out here that investors need to be stock-specific rather than looking at the major benchmark indices alone for basing their investment decisions. 

While after many months markets do look dull due to lack of triggers, there seems to be lot of action in small-cap and mid-cap stocks. Do look actively in this space for higher returns. What happens in the US will also drive the markets and, broadly speaking, the new tax bill in the US is sentimentally positive for the global markets. 

In this issue, which happens to be Banking Special issue, we have detailed the problems faced by the sector and explained exactly how bad the NPA situation is in the country. We have come up with four top banks that one can invest in. Clearly, we see investing opportunity in the sector and if there was one most important advice I had to give to my dear investorreader friends, it would be – “Do not ignore banking stocks in your portfolio”. 

Promoter shareholding has always been one of the most important factors to track for the long term investors. In the cover story, we have shared some useful insights on the companies that have seen change in their promoter holdings over the last three years. I will be delighted if you can take advantage of these insights and reorient your investments suitably. 

Tracking earnings and its quality is most fundamental to equity investing. We have analysed Q2FY18 results for you and have highlighted some of the key patterns emerging during this quarter. Again, I am sure the guidelines given by us should help you as investors in assessing the markets correctly. 

Penny stocks investing is something that is dear to majority of investors. Clearly, penny stock investing is not for those investors who dabble with equity markets superficially. Only savvy investors should look at penny stocks strategically and contemplate about including them in their long term portfolio. Feel free to let us know if you found our special report useful. 

Invest for the long run and show enough patience.

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