midcap: ETMarkets Morning Podcast: Midcaps & smallcaps may outperforn in 2021 too


Hi there! Welcome to ETMarkets Morning, the show about money, business and markets. I am Atul PM, and here is what we have to start your day.

>> D-Street speculates on Sensex’ next summit
>> RBI adds to market cheer with positive assessment of recovery
>> Midcaps & smallcaps may outperforn in 2021 too
AND
>> Financial advisers recommend balanced advantage funds

And there is more. But first, a quick glance at the state of the markets..

>> Nifty futures on the Singapore Exchange traded 1 points lower at 8 am (IST), signalling indecisiveness on Dalal Street.

ELSEWHERE
>> Asian investors were expecting a mixed day of trading a day after digesting a whole host of good news. Australia’s ASX 200 fell 0.08% in early trade Friday.

>> Wall Street peaked on Thursday, pushed upward by continued optimism about economic stimulus to counteract the Covid-19 disruption. Both the S&P500 and Nasdaq closed at record highs, up 0.03% and 0.55%, respectively.

IN CURRENCIES
>> Extending its gains for the third straight session, the Indian rupee added another 6 paise to settle at a near five-month high of 72.99 against the US dollar on Thursday, tracking a weaker American currency overseas and sustained foreign fund inflows.

>> The dollar weakened. The euro jumped 0.4% and the British pound 0.5%. The onshore yuan was little changed and as was the Japanese yen.

IN OIL
>> Oil prices weakened some bit. WTI crude declined 0.3% to $53.13 a barrel, while Brent crude was little chnaged at $56.11.

AND IN BULLION
>> Gold prices rose by Rs 575 to Rs 49,125 per 10 gm in Delhi amid firm global market trend, while silver rose by Rs 1,227 to Rs 66,699 a kg. In international markets, gold futures rose 0.1% to $1,871.90 an ounce.

All in all, the trade setup on Dalal Street looked positive. On Thursday, Nifty50 erased intraday gains to settle below the 14,600 mark, forming what looked like a Dark Cloud Cover. Analysts said a short-term trend reversal could be in the offing.

LET ME NOW GIVE YOU A HEADS-UP on some of the top news we are tracking at this hour.

After the Sensex scaled Mount 50K on Thursday, Dalal Street has started speculating on the time the index may take to top the 1,00,000 mark. Ace investor Rakesh Jhunjhunwala in 2007 had predicted that the Sensex would touch 50,000 in the subsequent six-seven years. While it took slightly longer to achieve the target, there are already predictions in place for the future summits for the benchmark index. Jhunjhunwala sees the Sensex touching 1,25,000 by 2030. Raamdeo Agrawal, Chairman of Motilal Oswal Financial Services, expects the 30-pack to leap to the 1,00,000-mark in five years.

… On a day the Sensex hurdled the 50,000 barrier, the usually circumspect RBI added to the cheer through its positive assessment of the recovery under way. High-frequency data, such as expansions in merchandise trade, bank credit and capital expenditure, underscored the robustness of the rebound that should help the economy log positive growth, Mint Street said.

… Midcaps and smallcaps are expected to outrun the largecaps for the second straight year in 2021 if the enabling factors such as a weaker dollar, strong liquidity conditions and recovery in the domestic economy remain on track. However, experts are cautioning about an overdue correction. Sensex has gained 95% from its March 2020 low. The BSE Midcap and Smallcap indices have gained 98.7% and 116%, respectively, from March 23 — the same day Sensex hit a four-year low.

… RBI has intensified its purchase of US dollars in the currency forwards market, dealers said, even as continued fund flows sent stocks to Summit 50K Thursday. The central bank is said to have bought over $1 billion on Thursday, primarily through two state-owned banks that transacted both in the spot and forwards markets, dealers said. This checked the local unit’s sharp rise.

… Booked profits on your stocks and sitting on cash, waiting for the right entry point? Well, that might not be the smartest strategy, given the difficulty in timing the markets. Financial planners say having no exposure to equities could dent wealth-building. Hence, they suggest allocating half the money through balanced advantage funds and the balance could be staggered over a 6-12 month period into a mix of multicap/flexicap and value funds.

LASTLY, AN UPDATE ON ALL THE STOCKS BUZZING THIS MORNING

>> The government expects some international oil majors to participate in the BPCL divestment process during the price bid stage, Union oil minister Dharmendra Pradhan has said.

>> InfoEdge-backed Zomato is closing a fresh $500 million investment in what is being widely regarded as a pre-IPO financing round, valuing the company at about $5.5 billion. The firm is aiming for an IPO by June this year

>> Sebi on Thursday imposed a penalty of Rs 1 crore on HDFC Bank for invoking securities pledged by BRH Wealth Kreators, which is a violation of the regulator’s interim order.

>> Asian Paints on Thursday reported a 62.28% jump in its consolidated profit to ₹1,265.35 crore for the third quarter ended December 31, 2020.

>> Two- and three-wheeler major Bajaj Auto beat the Street estimates to report its highest-ever quarterly revenue and profit during the October-December period helped by sharp demand recovery, especially in exports, and higher consumer preference for its high-margin premium vehicles.

That’s it for now. For all the market news through the day, do track ETMarkets.com. Have a great day ahead! Bye-bye





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