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Indian markets fall less than global peers. Should you buy on dips?
The Indian bourses are fundamentally strong and the FIIs show a lot of interest and pump in their lot as they find them to be rewarding. Analysts too find the small corrections as an opportunity to plunge into the market as the Indian economy is well positioned vis a vis the global threats. While unabated Inflation is a cause of worry which might provoke the Regulators to indulge in jacking up interest rates, the Indian stock market being what it is based on history, will rebound in the near future.
Stock market update: Sensex was down 500 points while Nifty held on to 17,900 levelsIndian stock market indices Sensex and Nifty are down less than 1% despite global markets being in a sea of red.
As Indian stock markets started this current leg of rally from close to 15,000 levels (Nifty) in June, buy-on-dips approach has paid good dividends. With Fed meeting scheduled later this month and global markets seeing a selloff after hot US inflation report, , An investment strategist suggests retail investors avoid aggressive buy-on-dips approach for the time being even though Indian markets continued to outperform global peers. The Nifty was today down 0.8% to 17,900 levels even though global markets were in a sea of red. The Sensex was down nearly 600 points.
“The 4.32% and 5.12% cut in S&P 500 and Nasdaq overnight again reminds us that there is more uncertainty about inflation and growth and more volatility ahead for markets. The worse-than-expected CPI inflation data in the US, despite cooling gas prices, was a surprise. Now the market fears that inflation is getting entrenched and an ultra-hawkish Fed might trigger a hard landing for the US economy. This thinking too, might change when new data emerges,” said a Strategist.
“The ‘buy on dips’ strategy has been working very well for Indian stock markets for more than a month now. Investors should watch out whether this strategy continues to work. Aggressive buy on dips is better avoided. Wait for clarity to emerge,” he said.
“Domestic-economy facing stocks like high quality financials, capital goods, autos, segments of FMCG and telecom are relatively safe now. Global economy-facing stocks like IT and metals are likely to be under pressure,” he added.
An Analyst said: “With stronger inflation, the US Federal Reserve’s hawkish stance could continue in this month’s policy meeting, leading to worries of a growth slowdown in key economies. Besides, the US 2-year/10-year yield curve remained inverted at around 33 basis points, which is again a key recession warning.”
On Tuesday, US government data showed that the annual increase in CPI had slowed slightly in August to 8.3%, but that prices continued to rise month on month, increasing by 0.1%. The news shook equity markets, where there had been widespread expectations of US year-on-year inflation being around 8%, with a decrease in prices compared with July.
The news has for now dashed hopes of a slowdown in the US Federal Reserve’s campaign of increasing interest rates to cool the overheating economy. The Fed has already instituted two consecutive 75-basis-point hikes, and there are widespread expectations it will make a similarly sized increase at its meeting next week.
Rupee falls 10 paise to 79.67 against US dollar in early trade.
The rupee depreciated by 10 paise to 79.67 against the US dollar in opening trade on Monday, even as the equity market opened on a positive note.
At the interbank foreign exchange market, the rupee opened at 79.66 against the greenback, then fell to 79.67, registering a decline of 10 paise over its last close. In initial deals, the local unit also touched 79.64 against the dollar.
On Friday, the rupee appreciated by 12 paise to close at 79.57 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.23 per cent to 108.75. (PTI)
Gold: We expect gold to trade higher towards 50790 levels, a break of which could prompt the price to move higher to 51190 levels.
Crude: We expect crude to trade lower towards 6590 levels, a break of which could prompt the price to move lower to 6450 levels.
Base Metal: We expect copper to trade higher towards 662 levels, a break of which could prompt the price to move higher to 673 levels.
Stock Market LIVE: Sensex reclaims 60k, Nifty adds 120 pts; IT, Media shine
Stock Market Today: Positive sentiments intact despite the impending Fed rate hike.
Share Market LIVE Update: Indices gain around 0.7% on Monday as they followed Wall Street’s Friday rally and a green start in Nikkei. Sensex jumps around 400 points and Nifty around 100. Tech Mahindra and Adani Ports zoom in the early session, whereas Shree Cement slips.
Traders almost fully expect another jumbo-sized Fed hike next week following two 75-basis-point increases while major currencies regain some of the ground they lost to a surging dollar. Markets in China, Hong Kong and South Korea are closed today for holidays.
After impressive gains last week, Shree Cement lags in today’s session, slips 1%
6 common mistakes to avoid in a rising stock market :
The stock markets have really shown considerable resilience and bounced back thanks to the economic turn around and FIIs coming back to Indian markets. So investors are by and large excited over this upsurge despite some small corrections. Share market has given extra-ordinary returns to those who are smart and careful investors, much more than what other investments can . So it’s time to watch the market and do some bottom-fishing for long term gains.But informed investment strategy is a pre-requisite for unloading your hard-earned money. Please follow the tips given for safe investments.
Analysts expect the second half of the year to improve due to the easing consumer inflation index and softening commodity prices that could ease the pressure on margins. Easing inflation will encourage retail investors to stay optimistic about economic recovery.FIIs have pumped in almost Rs 16,860 crores (approximately US$ 2.1 billion) between 1st August 2022 and 18th August 2022.
The stock markets rose after four months of downward movement. The Nifty closed at 17,965 and Sensex closed at 60,326 on 18th August 2022. During the last month, the Nifty Midcap 100 has gone up by around 10% while the Nifty Smallcap 100 has gone up by around 7 percent.
Bear in mind that they had pulled out Rs 2,89,970 crores (approximately US$ 36 billion) during this calendar year between January 2022 and July 2022.
According to our research, 42% of companies that have reported their Q1 FY23 earnings so far have outperformed by exceeding street expectations.
This positive rally doesn’t mean one must forget everything and let the allure of high returns derail their plans committing mistakes that could put a brake on their wealth creation efforts. It is vital to keep a check when the markets are down. It is even more crucial to do it when the markets surge.
Avoid making these six common mistakes
1. Investing in Bulk due to FOMO
When the markets are rising, investors experience the fear of missing out (FOMO). Such investors believe it is the right time to earn some more quickly. Bulk investing is not the right approach for one to follow. Instead, invest in a staggered manner, and diversify across asset classes so that it helps to meet financial goals. One should consider staying invested for the longer term if wealth creation is the goal.
2. Exiting Quality Stocks
In a rising market, good-quality stocks could seem overvalued. Investors tend to sell such stocks and invest in stocks trading at lower valuations since the markets are rising. Doing so can be a mistake and hamper wealth creation eventually. Some of the biggest wealth creators in the Indian stock markets have always been highly valued due to being MNCs or having highly credible promoters or enjoying an increase in free cash flows year on year. So, .. if you have invested in fundamentally sound stocks, don’t exit unless there is something inherently wrong with the business.
3. Following the Herd
Herd mentality is a common investing bias that becomes more apparent when the market soars. Consider the financial goals and study the stocks instead of investing on the basis of Whatsapp forwards or tips. Don’t be impulsive; pause, research, understand if it meets the needs, and then decide. Consider taking advice from a financial advisor if needed.
4. Ignoring your Risk Appetite and Financial Goals
Investments are based on risk appetite and financial goals. Investors may ignore risks when markets are rising. Even risk-averse investors may believe in the euphoria and disregard their risk profiles. Investors must be cognizant of their risk-taking capabilities and shouldn’t go overboard while investing. For instance, one may be tempted to invest one’s emergency funds or money saved for achieving a specific financial goal. For cautious investors, sleepless nights at the slightest hint of volatility may not be far away. It could mean making mistakes in investing decisions and unbalancing the asset allocation.
5. Getting influenced by popular individuals
Today there is no dearth of popular individuals sharing their views on which stocks should be purchased or sold. They may offer stock recommendations over social media and messaging platforms. Some of them may not even have the relevant certifications. Hence, one may want to be careful while buying shares only on the basis of recommendations provided by such individuals.
One may also find renowned fund managers sharing their views on stocks or sectors that are bound to do well in a rising market. However, they could have completely different investment objectives and risk appetites which would not be aligned with those of retail investors.
6. Focusing on the next big theme or trend
Seasoned investors may be adept at changing their strategies and would be able to identify the next theme or trend that could enjoy a bull run. But retail investors would be advised to maintain a diversified profile unless they have a credible investment advisor guiding them. For instance, investors invested in IT and Pharma stocks that grew as the markets recovered after COVID-19. They believed the exponential growth phase would continue. However, when the bull run gave way to corrections, they lost money. An investor must diversify and invest in companies with prospects even when the markets are high.
Remember, markets always perform in cycles. Periods of volatility are followed by euphoric highs which can be again dented by falling markets. An investor should ideally remain invested in fundamentally strong stocks across these business cycles to create wealth over the long term. Opportunities can be discovered by conducting thorough research in both bull and bear markets.
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One share now ₹50,000. Multibagger stock hits new milestone!!!
Shares of Page Industries rallied to hit the ₹50,000 apiece mark for the first time as the stock surged to life time level of ₹50,338 per share on the BSE in Friday’s early deals after the apparel manufacturer reported a multi-fold jump in the first quarter net profit.
Page Industries Ltd on Thursday reported a multi-fold increase in its net profit to ₹207 crore for the first quarter ended June 2022 as compared to ₹10.9 crore during the April-June period a year ago. Its revenue from operations during the quarter under review was ₹1,341 crore, up over two-fold compared to a lower base of the pandemic-impacted Q1 FY22.
“From a medium-to-long term perspective, we believe Page does have (operating) margin expansion potential with Page’s EBITDA margins having remained in the narrow range of 18-21% for the last 10+ years. We believe Page has front-ended investments in new avenues,” said brokerage firm ICICI Securities while maintaining Add rating on Page Industries shares with a target price of ₹52,000.
Page Industries Q1FY23 topline was a healthy beat to street estimates, as per Axis Securities as revenue was led by strong volume growth. The company’s gross margins were below expectations on account of higher inflation in cotton and packing materials.
“PAGE saw increased momentum in sales across all its product categories driven by portfolio enhancement and distribution expansion. Total MBO coverage is now at 113,715 and the EBO network stands at 1,144 in Q1FY22. All channels and supply chains are back to normal and expect a continued robust demand outlook in FY23,” said Axis Securities with Hold rating on the stock and target price of ₹51,900.
Page Industries is involved in manufacturing and retailing innerwear, and has the exclusive licensee of Jockey International in India, Sri Lanka, Bangladesh, Nepal, Oman, Qatar, Maldives, Bhutan, and the UAE. It is also the exclusive licensee of Speedo International for the Indian market. The multibagger stock has rallied more than 18110% in 15 years since its listing in March 2007 when it was trading around ₹270 per share level.
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