Market last week
Nifty gained this week led by positive global sentiments buoyed by easing trade war tensions between US and China. Though domestic economic growth being on the lower side, risk appetite of investors is gradually improving on expectation of further steps to be undertaken by the government in upcoming budget to revive consumption and policies to attract liquidity in the market. Market hit record highs on expectation of the measures and GST council did not adopt any rate hike given rising to inflationary pressures. Metals & IT stocks traded higher on hopes that easing trade tensions could ensure global growth and increase in the order intake.
Despite premium valuation of key indices, market is making higher highs led by foreign inflows due to risk-on strategy. But broad market performance is yet to match with the performance of main indices. The progress in global sentiment will help risk taking ability of investors which will extend the liquidity to broad indices. Going ahead, Union budget is likely to be crucial for the market on account of new steps to attract investments. Considering strong liquidity, the momentum is likely to shift from pricy stocks to value stocks going ahead. We believe that this is a good time to invest in Cyclical stocks & sectors like Metals, Energy, Capital Goods and Industrials. However, a short-term consolidation cannot be ruled out as investors may slid to a holiday mood, last two weeks we had a solid Santa clause rally.