In the correction that markets saw in the last four trading sessions, the financial sector stocks, right from banks to other players also declined. But if one looks at the magnitude and the internal breadth of the sector it was much better as compared to a month back when the market correction was started by HDFC bank. There was a bit of profit booking in the PSU bank space, but once again after a small corrective move, things were back with a strong intraday recovery. The way things are panning out in the industry with regulatory tightening taking place, there is very likely that we might see a divergence in performance of different segments of this sector which has the highest correlation with the GDP growth. Better balance sheets and strong franchise are likely to be the differentiating factors. The factor which is largely technical in nature is the shareholding patterns that will also impact the performance of the stocks from this sector.
Bank of India Small Cap Fund, the topper in the list, offered 31.01% in a five year horizon. The scheme is benchmarked against Nifty Smallcap 250 - TRI, which offered approximately 10%.
After a strong phase of outperformance , mid cap stocks are witnessing a a wave of profit booking move. Unlike the past few weeks, where a rotational profit booking was taking place, this time the correction is taking place across the board. Now how long it will continue will depend on how the SEBI advisory pans out and also how nifty moves. During this phase, analysts are bullish on select stocks from different sectors, some of which are either the leaders of their sector or part of the top three companies which are known to be well managed.
When it comes to volatility, there are 3 things that one needs to take into account. Magnitude of volatility, frequency of volatile movement, and third which are the sectors leading it and overall market breadth during a volatile phase. If one looks at these three things then it is very clear that while some might be feeling volatility has come in just the last two trading sessions, the fact is that markets have been volatile since the start of 2024. There is a high probability that we might see more of it in the coming weeks. So, it would be better to stay prepared for volatility. One of the ways for that would be to stay with largecaps, and especially the ones showing a streak of outperformance at a time when others have been under pressure. Another reason valuations are high in large part of the mid and small caps and they are the ones that might lose more weight if the markets stay under pressure due to profit booking. Also if there is any further development on the SEBI advisory
While every sector of the economy has been witnessing an improvement and policy push, one sector which was the first one to come in the focus of the government was the road construction sector. At first, it was the central government, but if one looks at how important it has become for gaining political capital, every state government has been focusing on road and highway construction. The impact of a coordinated effort between state and central government is that the lead time for the construction of roads comes down very sharply. This means that the working capital of the company which is part of this whole process of construction of roads comes down sharply. Given the fact the margins in the infrastructure business are not very high, an improved payment cycle itself leads to better overall margins. We take a look at six companies which are involved in this sector, the reason why at this point of time is because tenders which have come in the last one month are dominated by road cons