Shillong, July 28: According to V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the markets are facing strong headwinds, including the US 10-year yield rising sharply to 4 per cent, the dollar index reaching 101.7, Brent crude surpassing $83, and Foreign Portfolio Investors (FPIs) selling stocks for Rs 3,979 crore in the cash market. Despite these challenges, he notes that the market also has some tailwinds.
One positive factor is the strong US 2nd quarter GDP growth rate of 2.4 per cent, which could offer support during weak market periods. As the ongoing global rally is primarily driven by the US soft landing narrative, this data may provide some stability during market downturns.
As per news agency IANS, Vijayakumar cautions investors to be careful while investing in small-cap stocks, as they are currently in overvalued territory. On the other hand, he suggests that large-cap stocks, even when richly valued, are safer compared to riskier small-caps.
In terms of specific sectors, the pharmaceutical industry is making a comeback, and there is value-buying observed in beaten-down metal stocks.
As of Friday, the BSE Sensex is down by 186 points, trading at 66,080 points. Several prominent stocks have also seen declines, with Bajaj Finserv down more than 2 per cent, and Tata Motors, TCS, HCL Tech, HDFC Bank, and Tech Mahindra down more than 1 per cent.
