Investors should focus on midcap stocks in their portfolios instead of largecap.
Advice to exit IT, pharma, telecom companies.
Despite the new wave of Corona, the stock market is showing tremendous enthusiasm. The graph of new cases is going down this week, although the number of deaths due to corona has increased. Given the current situation, brokerage firm Morgan Stanley says that by December, the Sensex can touch historical figures of 61 thousand.
The brokerage firm says that the stock market will regain momentum in the second half of 2021. At present, the Sensex is trading at the level of 50 thousand. This means that in the next six months it will increase by about 20 percent. According to the report of Morgan Stanley, by the end of this year, the Sensex will cross the figure of 55 thousand. However, it can also touch the level of 60 thousand if other aspects come together. India’s performance in the emerging market will be the best due to better results and good valuation of companies.
June quarter results will come down slightly
It has been said in the report that there may be a slight decline in the results of companies in the March-June quarter. This will be due to new cases of Corona appearing. However, the market and investors are now looking away. The market has understood very well that the decline is immediate, while fast is its future. The report said that the market will be watching the macro economic fundamentals and earning momentum. The market will no longer favor liquidity and valuation.
Focus on midcap
The brokerage firm says that investors should focus on mid-cap shares in their portfolios instead of large-caps. However, investors who are small-cap stocks should focus on large-cap stocks.
Earning opportunities in financial and utilities shares
Apart from this, where investors should invest it has also been suggested. Investors have been advised to focus on consumer disretionaries, financials, utilities and industrial shares. Apart from this, they have been advised to exit IT, pharma, telecom companies. Regarding financial stocks, he says that the Reserve Bank has not cut rates in a long time. In such a situation, there is a possibility of a rate cut in the coming days.
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