Tag: Stock market

In a falling market, here are a few dos and don’ts to help long-term investors

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Even seasoned investors have panicked following the recent beating in the stock market. For long-term investors, the downturn in stocks, especially mid-caps has led to a massive erosion of wealth and confidence.

Fears of a liquidity crisis after the IL&FS default, escalating trade war tensions between China and the US, and other macroeconomic factors have led to the benchmark Sensex and Nifty tanking around 10 percent in the past month.

Given the increased volatility in market movements, most investors, including long-term investors tend to make a few mistakes in their investment behaviours. Even though this correction was long anticipated after a buoyant 2017, there are ways investors can come out of it stronger.

Here is a list of dos and don’ts in a falling market for long-term investors:

DOs:

Continue investing in Systematic Investment Plans (SIPs)

Mutual funds have also tanked in the past month. Panic selling by foreign investors has sucked liquidity especially from liquid and debt funds. However, from a long-term perspective, these dips are temporary. The market historically has bounced back from such corrections. It is best to avoid knee-jerk reactions and stop all investments.

One of the benefits of investing through SIPs is the principle of rupee-cost averaging. Buying more units at a lower price averages the cost per unit of the fund leading to greater gains when the market is in a bull phase. This is why long-term investors should continue to invest in SIPs especially in a falling market.

However, that being said, it doesn’t mean that you should not reevaluate their portfolio. If the mutual fund isn’t performing as well as its peers, you can switch to better performing funds. Mid-cap and small-cap mutual funds are seeing sharp corrections as reflected in the stocks these funds invest in.

If the fund is invested in quality stocks with good business potential, it makes sense to stay invested. If the risk and volatility in the market are more than your threshold, you can switch to a large-cap fund that is relatively more stable in its growth. There is no need to redeem the mutual fund till it shows growth.

In a falling market, it is better to stick to SIPs even if it may not be in the same funds you invested in.

Purchase quality stocks at attractive valuations

Most of the top 100 stocks on the Sensex are down 10 percent to 40 percent in the last one month. This presents an excellent opportunity to pick stocks that are fundamentally sound at attractive valuations. Several large-cap stocks and good quality mid-cap stocks have seen a correction.

However, investing in these fundamentally sound companies can pay off in the long run. Use the opportunity presented by a falling market to expand and diversify your portfolio in quality stocks.

One important point to consider is to invest in stocks after thoroughly studying them. A well-researched decision of buying a stock can pay off handsomely in the long run when the stock recovers.

DON’Ts:

Panic sell based on news

Most stocks have bled heavily in the past month in tune with the benchmark indices. News about many stocks reaching their 52-week lows has flooded the markets. As a long-term investor, this is not the time to sell off stocks in a panic.

If the stock is of a fundamentally sound company with good medium-term business prospects, then the stock will show a recovery in the next bull cycle.

If the company has strong earnings growth potential, then the stock will show an upside in the next earnings cycle itself. Resorting to panic selling will only lead to mounting losses unnecessarily. Long-term perspective iron out high and a low, which is why you should retain quality stocks for a 3-5 year horizon.

That being said, if a stock has no potential of recovering its value, it is best to sell and exit the stock. It is necessary to evaluate each stock and exit stocks which do not have a good earning potential or are facing repayment defaults.

Invest in stocks based on non-verified stock information

A falling market presents an opportunity for many people on the sidelines to enter the market. As such, several technical players speculate about the growth of a particular stock, especially stocks priced cheap. Investing in stocks without studying them thoroughly is a risky gamble, even in a falling market.

There are many people who look to capitalize on stocks that are trading at their 52-week lows, however, this is an extremely risky strategy because these stocks could be at their lows because of weak fundamentals. Make a decision to invest only once a stock shows good fundamentals and growth prospects for the medium to long-term.

To conclude, a falling market presents an excellent time for investors to invest in quality picks. By avoiding non-verified stock information and taking decisions after thorough research, a falling market can turn out to be profitable even for a long-term investor.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Lot of negative news priced-in, IT sector looks very attractive: Tushar Pradhan of HSBC Global AMC

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s Sensex jumped more than 500 points in early morning trades on Friday, following a rout in the previous session, as a global selloff showed some signs of abating in Asia.

CNCB-TV18 spoke to Tushar Pradhan, CIO-India at HSBC Global AMC, about the recovery in domestic stocks and outlook.

“The Indian markets are always to going give us something to think about, so it is difficult to say whether worst is over for the market or not, but one needs to focus on factual data and other is sentiment, both local and external,” said Pradhan.

Talking about the earnings season that kicked off with in-line TCS results on Thursday, Pradhan, “One has already seen bad news both from the external as well as domestic but earnings could be the silver lining. So, one cannot say if the worst is over but a lot of the bad stuff is over.”

When asked about the chaos in NBFCs space, he said, “One cannot take a generic call on all the companies because each of the companies have a different market and their ability to raise capital to service that market is also different.”

“Companies which can show robust growth and are ring-fenced from these large macro moves – like companies that finance consumer discretionary items, it is matter of changing the capital structure, these companies will do well,” said Pradhan.

With regards to the IT sector that saw some selling pressure today, he said, “There is a fundamental case to invest and other is a valuation case to invest. In past most investment decisions were taken on growth but after the correction, the investment universe is looking attractive from a valuation perspective”.

According to Pradhan, “The IT space looks attractive for 2-3 reasons. One, is that GDP Growth in US is very strong, cash rich companies in US are looking to deploy money into investing into IT infrastructure. All this give confidence that the momentum for the sector will continue. The tailwind to the current earnings of IT companies is weaker rupee, so going forward there are reasons for earnings upgrades.”

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Closing Bell: Sensex holds 34,000, indexes end 2% lower, TCS ends 3% ahead of Q2 results, PSU bank stocks drag

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sebi calls for bigger, cleaner and safer markets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Market regulator Sebi on Tuesday called for bigger, cleaner and safer markets and enhancing the overall governance standards in the market for issuers, intermediaries or market infrastructure providers.

It also said that call on the recommendations by fair market conduct committee to further strengthen the rules to deter financial crimes like frauds, market manipulations and insider trading, will be taken soon.

“We are also equally committed to ensure clean and safe markets. We are duty bound to ensure that the market mechanism is not misused or manipulated by the unscrupulous elements,” Securities and Exchange Board of India (Sebi) chairman Ajay Tyagi said at the ‘Ficci CAPAM 2018’ conference.

“The fair market conduct committee constituted by Sebi has since submitted its recommendations, which were also put in public domain seeking comments. A view on these recommendations will be taken soon,” he added.

He said that the the manipulators will not be allowed to take advantage of the volatility in the stock market, which has plunged by around 900 points decline in the last two days on a combination of global and domestic factors impacting investor sentiment.

“The domestic markets are volatile, but they are globally volatile too. Our risk management economics are in place and manipulators will not be allowed to take advantage,” Tyagi said, adding that the regulator is vigilant.

He warned that increase in oil prices, tighter global financial conditions, spillover risks from a global trade conflict and rising regional geopolitical tensions are some of the potential economic risks for the country, despite a positive economic growth outlook.

Tyagi said objectives of improving ease of doing business and maintaining market integrity have to be properly balanced.

“While it may not be always possible to accurately quantify the costs and benefits of making a regulation, it will be our endeavour to keep on improving the processes going forward,” he said.

The Sebi chairman said that the continued investor confidence is a crucial factor in attracting more investors to the securities market and right governance framework and a transparent and clean market go a long way in meeting these expectations of investors at large.

“Sebi will continue to focus on further enhancing the overall governance standards in the market, be it for issuers, intermediaries or market infrastructure providers,” said Tyagi.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RIL set to become the boss on the Nifty again in weightage terms

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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After more than half a decade, Reliance Industries Limited (RIL) is back at the top in terms of weightage on the Nifty.

In the past six and half years, pole position on the Nifty was held by companies such as ITC, Infosys, ICICI Bank and HDFC Bank.

Reliance becomes the top weighted stock on the Nifty for the first time since 2012. @Nigel__DSouza with more pic.twitter.com/We0WiUstJX

— CNBC-TV18 News (@CNBCTV18News) August 16, 2018

Reliance Industries weightage on the index in the past 15 months has gone up by 50 percent. In May 2017, it was barely 6.14 percent and now the company topped the 9.45 percent mark.

In fact, in the past one year, Reliance Industries stock has given returns of 58 percent which is a stark outperformance to the Nifty which is up just 17 percent.

The total market capitalisation added by RIL in the past one year is Rs 2.8 lakh crore which is a sizeable number as many listed companies’ total market capitalisation is under Rs 2.8 lakh crore.

Last month, RIL has reclaimed the $100 billion market capitalisation club and became the second Indian listed company along with TCS to join the elite club.

Remember from June 26, 2009, the Nifty 50 is being computed using float-adjusted market capitalisation weighted method, wherein the level of index reflects the float-adjusted market capitalisation of all stocks in the Index.

Earlier, the total market capitalisation was used to compute a weightage of a stock on the Nifty, but was changed as there were heavyweights such as government-owned ONGC that had a big market but little free float of the stock.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Are we nearer the market top than the bottom?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Numbers speak louder than words and if we look at benchmark index like the NSE’s 50 stock index, the Nifty, as a mirror of market returns, it pays to take a closer look at its valuation.

A quick scrutiny of the Nifty index value trend and its valuations at peaks and troughs over the past decade reveals some interesting facts.

The index has peaked at PE valuations of between 26x to 29x in the recent past, while the bottoms have been mostly rising steadily from about 15x to 21x.

Given this, at the current PE of a little over 27x, the market can’t be said to be severely elevated.

If we assume that the long-term market trend is up and we aren’t talking a few months, but some years here, we could expect the earlier valuation peaks to be exceeded.

Given we have got to over 28x in the past, an expectation of peak value of 29-30x doesn’t seem far-fetched.

If we work with 30x as a number, the peak Nifty value could well be over eight percent higher from here at about 11,900-12,000.

However, what seems clear is that we are definitely nearer a top than a long term bottom.

That said, given that the index trend has been outpacing the rise in valuations— due to strong earnings growth — a further upward revision in bottom valuation should not be discounted.

If we work with a bottom multiple of about 25x, it gives us an index of about 9,900-10,000.

So, irrespective of levels, while there may be some more steam left in the market before it runs out of breath, if you are not in the buy-sell game, but a buy and hold investor, it might pay to wait a little before venturing in.

Remember, the market never moves in a straight line.

For every peak, there is a bottom and while catching a bottom is difficult, flirting with stocks nearer to what might be a peak could be even more injurious to your portfolio’s health.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Lodha Developers hopes to get lucky with Rs 5,000 crore IPO

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Indian real estate giant Lodha Developers has not had an easy path to the bourses. The company had plans to launch an IPO in 2009 but the global financial crisis and the resulting impact left it with no choice but to withdraw, and 9 years later, CEO Abhishek Lodha believes that the company has scaled up substantially as it heads for a public listing worth over Rs 5,000 crore.

Lodha developers clocked an impressive Rs 9,000 crore in revenue last year with Rs 8,100 crore in net new sales, but has been grappling with a higher number than that – its Rs 18,000 crore debt. It’s no surprise that Rs 4,500 crore of the capital raised will be used to prepay some of that debt.

The IPO is an important step to consolidate a plan that the Lodha group has been focusing on over the past few years – targeting middle income and affordable housing in the MMR region.

While Abhishek claims that Lodha is known more for its super-luxury projects, The World Towers and The Park, 44 percent of the company’s sales last year came from the middle income and affordable housing segment, and this number is set to grow as the company scales up its township projects in Dombivali and Thane.

The company has built up a land-bank of close to 500 million square feet, which Abhishek estimates will last 3-4 years.

The Lodha IPO is one of many primary issues that we have seen over the last three years, but it will be the first IPO of a major private real estate developer since Oberoi Realty listed on exchanges in 2010.

Considering that the real estate sector was plagued with inventory pile-ups even before the dual shocks of demonetisation and GST, industry watchers will be keenly awaiting the market’s response to a new offering from a developer.

While the Lodha group will be hoping that its decade-long wait has been worth it, the real estate sector at large will be pondering a very similar question.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nifty, Sensex end flat, IT rises ahead of Infosys Q1 results, MidCaps pull indexes down

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Indian stock markets closed marginally lower, with the BSE Sensex ending at 36,541, down by 0.02 percent, or 6.78 points lower, while the Nifty 50 ended at 11,018. MidCaps dragged both indexes lower with the Nifty MidCap declining by over a percent. ITC, ICICI Bank and Axis Bank were among top losers.

(Market update as of 3.40pm)

Here’s how the markets fared ahead of the closing

Indian stock markets declined ahead of the close on Friday after trading flat nearly all afternoon, dragged lower by underperformance in MidCaps. The Sensex traded lower by 16.12 points, or 0.04 percent, to 36,532.29, while the Nifty was down by 16.30 points, or 0.15 percent lower, at 11,006.90 at 3pm.

Nifty MidCap declined by 1.14 percent, while BSE MidCap lost 0.86 percent. Most BSE Sectoral indices traded lower, except Energy, IT, Consumer Durables. Realty, Telecom, Industrials, Basic Materials declined over a percent.

NSE PSU Bank declined 2.05 percent, while losses in Media were at 3.24 percent. FMCG declined about a little over a percent. No major change among laggards with SBI, Axis Bank, ICICI Bank, ITC leading the list. Infosys, Wipro, Reliance, Adani Ports, Coal India gained on both indexes.

(Market update as of 3pm)

Here’s how the markets fared in the afternoon session

Indian shares were trading in the green on Friday, tracking firm gains in the Asian peers. The BSE Sensex was trading at 36,613.17, rising by 64.76 points, while the NSE Nifty 50 was at 11,025.10, as they approached the second half of the trading session.

Earlier in the first hour of trading, the Sensex scaled a new high crossing 36,700 mark for the first time, reaching a peak of 36740.07. The 30-share index gained 973.86 points in previous five sessions to close at a record high of 36,548.41 on Thursday.

The Sensex gainers included Coal India, Reliance, Wipro, Infosys, Kotak Bank, HDFC Bank, Adani Ports, TCS, Maruti Suzuki, Asian Paints, HDFC, Tata Motors, while Axis Bank, ONGC, SBI, ICICI Bank, ITC, Bajaj Auto, M&M and Hero MotoCorp were among the losers.

Nifty gainers were Infosys, Wipro, Reliance, Kotak Bank, Coal India, while the laggards were UPL, Bharti Infratel, HCL Technologies, Axis Bank and SBI.

Both MidCaps on benchmark indexes underperformed. The Nifty MidCap was down by more than a percent, while the BSE MidCap declined by 0.82 percent due to selling in bank, consumer and auto counters.

Among BSE sectoral indices, except energy and information technology, all other indices traded lower, with telecom being the worst, down by 1.34 percent.

Sectoral indices on the NSE also traded lower, except Nifty IT. Nifty PSU Bank was lower by more than 2 percent. Realty, FMCG, Media and Auto were also down by up to 1.72 percent.

Public sector bank stocks took a beating after weak Index of Industrial Production (IIP) and inflation data. Bank of Baroda, Punjab National Bank, State Bank of India, Federal Bank were the top losers in the BSE Bankex, falling up to 4 percent.

Asian stocks rose as US China trade war concerns simmer. Hong Kong’s Hang Seng gained 0.58 percent, Japan’s Nikkei rose over 2 percent, while Shanghai Composite Index shed 0.16 percent. Wall Street gained overnight with the US Dow Jones Industrial Average closing 0.91 percent higher led by technology stocks.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Closing Bell: Sensex, Nifty end marginally lower, MidCaps drag indexes, bank shares dip, IT gains, Infosys up ahead of Q1 result

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow