The vaccine has proved to be a booster shot for the market. Do you think that it is going to pause for a bit or are we going to see the Santa Claus rally?
There are two things here. Historically, December is a month where markets do not fall too much. It is a very stable market with a positive bias. We have already seen a positive bias at the market as on Friday’s close. It is more or less near the average returns for December historically. We need to put that in the context of the fact that we have had a straight line rise in the market and so there has been a 1700 points straight line rise in the Nifty. and if the Nifty is not a outlier, it through for most of the markets globally if you see the Korean Market the line is even straighter like it is just like a vertical move up.
Vertical move ups are very tough to sustain because they are more liquidity driven rather than conviction driven. It is just that the money flow is so great that the move is happening. I would think that the probability that the market will flatten out and give a correction going forward is greater. However, that does not mean that the bull phase will get over. We have seen a straight line up move as sometime over next few weeks, we will get a sharp and fast correction.
ICICI Bank stock is at a nine-month high. Is the rally behind us or could we see a fresh move in ICICI Bank?
We have been seeing continuous reallocations in the financial space. When Kotak came out with results and said they will be focussing on growth, we saw a huge rerating and Kotak went up from Rs 1,350 to Rs 1,850. There is also some MSCI rebalancing. Funds also went into Kotak which saw a 25% up move. I think a rotational move is happening with the RBI restrictions on HDFC Bank. There could be some slowdown out there. The overall system credit growth is very muted and in that context, there is a possibility ICICI Bank could take away some market share .
Just a few weeks back, we were discussing why ICICI Bank is not moving up and now it is the other way around. The probability of ICICI outperforming is greater. However, it is an index stock and if the index stalls and corrects, we could see some correction there also. But directionally, for long-term investors, the ICICI Bank story is improving both in its core businesses as well as its subsidiaries.
A stock which has been a formidable wealth creator is Page Industries, barring the last two years. The stock is giving great returns. For an investor, in the next six months, will Page Industries make money?
Page Industries is one of the PE holdings in our midcap portfolios. In my view, Page Industries is in a new phase of growth starting now. We will see a growth revival playing out in the company as it gets over three years of sluggish growth. It falls into new categories which are showing good growth and this entire work from home scenario has also helped it. The next few years now starting from here could see Page Industries get back to a growth patch which can lead to the stock doing well.
It is a challenge for short-term investors because valuations do not look cheap but in my view the stock has never been cheap and we will not see the stock fall so much as positive results come through.
For investors, I would think that over the next 2-4 years, the stock could easily double from current levels. I do not know whether the stock will go up in next six months or not, but my guess is it will go up because it was a very over owned stock at one stage everyone was positive and then people lost hope. As results start coming through, the stock will start rewarding the investor.
Should one take 20-25% profits off the table in Tata Steel, SAIL and others?
Metals is a very overbought sector today, especially the steel stocks. Everyone has got into them in a big way -- both in terms of trading or investing for a short run as well as leverage trade in the futures and options segment. From the steel stocks part, it makes absolute sense. For Hindalco or the other non-steel metal stocks, the move has not been as much and so we might not see a significant sell off as well. But in steel, it makes sense for investors to take some profits off the table.
"correct" - Google News
December 07, 2020 at 12:43PM
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Don’t bet on a Santa rally, market more likely to correct from here - Economic Times
"correct" - Google News
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