Latest news with #NiftyMidcap150
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Business Standard
12 hours ago
- Business
- Business Standard
Valuations, fresh equity supply key risk to Indian stock market: Chris Wood
High valuations, especially in the midcap space, coupled with fresh supply of equity via the initial public offers (IPOs) are the main risks to the Indian stock markets, cautioned Christopher Wood, global head of equity strategy at Jefferies in his recent note to investors, GREED & fear. The rally in the market (since recent lows), Wood cautions, means that valuations have become an issue again, most particularly in the mid-cap space. The Nifty Index now trades at 22.2x 12-month forward earnings after rising by 14.1 per cent from its April 7 low. While the Nifty Mid-Cap 100 Index trades at 27.1x 12-month forward earnings, following a 23.7 per cent gain from its April 7 low. 'This is also why corporates are again placing equity to take advantage of such valuations. The equivalent of $7.2 billion of equity supply was raised last month and $6 billion so far in June. It is this supply which poses the main risk to the market. Equity supply was running at around $7 billion a month prior to the correction, which began in late September last year,' Wood wrote. Mid, smallcaps steal the show From April 7 levels, while the Nifty 50 has rallied nearly 12 per cent till date, the up move in the mid-and smallcap indices has been sharper. The Nifty Midcap 150 index and the Nifty Smallcap 250 indexes have surged nearly 17 per cent and 18.5 per cent respectively during this period, ACE Equity data shows. Meanwhile, primary market activity is set to rebound in the coming week with at least four companies planning to raise a total of about ₹15,000 crore ($1.7 billion) via IPOs, reports suggest. Some prominent ones include Kalpataru, Ellenbarrie Industrial Gases, and Globe Civil Projects. HDB Financial Services Ltd., a unit of India's biggest private lender HDFC Bank, is also planning to launch its $1.4 billion IPO on June 25, reports suggest. This will be one of the biggest IPOs since Hyundai Motor India IPO in October 2024 that raised over Rs 27,000 crore. Capex theme The focus in the Indian market since the budget announcement on February 1, Wood wrote, has rotated to playing consumption rather than investment, helped by the monetary easing context with consumer finance stocks rallying sharply. The property market, now in its 5th year of an upturn, has further to run, he believes. 'Pre-sales growth of the top seven developers covered by Jefferies is forecast to accelerate to 22 per cent YoY in FY26 after slowing to 17 per cent YoY in fiscal year 2024-25 (FY25) ended March 31, a four year low. A lower mortgage rate, now at 8 per cent and expected to fall to 7.5 per cent when the latest Reserve Bank of India (RBI) rate cuts are passed on, should help boost sales in the affordable and mid-income segments,' he said. Portfolio rejig Wood has also rejigged his India portfolio, with the investments in Larsen & Toubro, Thermax and Godrej Properties will be removed and replaced by investments in TVS Motor, Home First Finance and Manappuram Finance, with four percentage points each. An additional one percentage point each will be added to the existing investments in PolicyBazaar and Bharti Airtel, he said. The investment in Larsen & Toubro in the global long-only equity portfolio has been replaced by an investment in Saint-Gobain, a French construction materials company. In the Asia ex-Japan long-only portfolio, too, the investment in Larsen & Toubro will be removed and replaced by an investment in PolicyBazaar, he said.
Economic Times
13 hours ago
- Business
- Economic Times
Mid-cap and small-cap stocks decline as investors take profits amid stretched valuations
Agencies Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: Mid-cap and small-cap stocks - the outperformers in the recent market rebound - led the declines in equities on Thursday as investors grew wary of stretched valuations. The Nifty Midcap 150 and Small-cap 250 indices fell 1.6% and 1.9%, respectively, on Thursday, while the benchmark Nifty ended 0.1% lower."Post the outperformance in May, mid-cap and small-cap stocks are witnessing profit taking at higher levels as the valuations have become slightly stretched," said Nilesh Jain, head of derivatives and technical research, Centrum Broking. "Typically, quick up moves are followed by such retracements."The Nifty Midcap 150 and Small-cap 250 indices surged 6.3% and 9.3% each in May, outperforming the benchmark index, which gained 1.7% in the same period. Mid-cap and small-cap stocks have performed better than large-caps as the perception that smaller companies are less impacted by the ongoing global uncertainties has fuelled domestic investor appetite in these purchases from domestic equity mutual funds - flush with flows from individual investors - also drove up their share prices, pushing valuations back to their near-peak levels."Mid-cap and small-cap stocks have rallied up to 35% from the April lows and outperformed the benchmark Nifty, which gained around 16% in the same period," said Pankaj Pandey, head of retail research, ICICI Direct. "Post the sharp rally, there is some consolidation in the market."Jain does not rule out further declines of 2-4% for now, but recommends buying the weakness."While the short-term structure remains weak, most of the companies reported fairly inline earnings in this quarter and investors can accumulate quality picks in a staggered manner at further declines," he said investors can 'buy on dips' as the global uncertainty is expected to have a limited impact on these stocks, and the RBI interest rate cut has boosted liquidity, which is incrementally optimistic.
Time of India
13 hours ago
- Business
- Time of India
Mid-cap and small-cap stocks decline as investors take profits amid stretched valuations
Mumbai: Mid-cap and small-cap stocks - the outperformers in the recent market rebound - led the declines in equities on Thursday as investors grew wary of stretched valuations. The Nifty Midcap 150 and Small-cap 250 indices fell 1.6% and 1.9%, respectively, on Thursday, while the benchmark Nifty ended 0.1% lower. "Post the outperformance in May, mid-cap and small-cap stocks are witnessing profit taking at higher levels as the valuations have become slightly stretched," said Nilesh Jain, head of derivatives and technical research, Centrum Broking. "Typically, quick up moves are followed by such retracements." by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Philippines: Affordable Refrigerators for Sale - Check Out the Prices! Refrigerators | Search Ads Search Now Undo The Nifty Midcap 150 and Small-cap 250 indices surged 6.3% and 9.3% each in May, outperforming the benchmark index, which gained 1.7% in the same period. Mid-cap and small-cap stocks have performed better than large-caps as the perception that smaller companies are less impacted by the ongoing global uncertainties has fuelled domestic investor appetite in these stocks. Continuous purchases from domestic equity mutual funds - flush with flows from individual investors - also drove up their share prices, pushing valuations back to their near-peak levels. Agencies "Mid-cap and small-cap stocks have rallied up to 35% from the April lows and outperformed the benchmark Nifty, which gained around 16% in the same period," said Pankaj Pandey, head of retail research, ICICI Direct. "Post the sharp rally, there is some consolidation in the market." Live Events Jain does not rule out further declines of 2-4% for now, but recommends buying the weakness. "While the short-term structure remains weak, most of the companies reported fairly inline earnings in this quarter and investors can accumulate quality picks in a staggered manner at further declines," he said. Pandey said investors can 'buy on dips' as the global uncertainty is expected to have a limited impact on these stocks, and the RBI interest rate cut has boosted liquidity, which is incrementally optimistic.
Hans India
3 days ago
- Business
- Hans India
Indian equities outperform global markets in May: Report
Mumbai: The Indian stock markets continued their upward journey in May, supported by a strong economic backdrop and broad-based buying across sectors, a new report said on Tuesday. The Indian equities outperformed several global peers, particularly in the mid- and small-cap segments, driven by solid macro fundamentals and improving investor sentiment, according to PL Asset Management's latest report. Siddharth Vora, Head of Quant Investment Strategies at PL Asset Management, said India's solid economic fundamentals and improved global sentiment offer a positive environment for investors. 'India's resilient macroeconomic landscape, coupled with improving global sentiment, presents a constructive backdrop for equity investors,' Vora added. While the Nifty rose 1.7 per cent to close near the 24,800 mark, mid- and small-cap indices recorded sharper gains. The Nifty Midcap 150 jumped 6.5 per cent and the Smallcap 250 surged by an impressive 9.5 per cent. This strong performance was backed by cyclical sectors like defence, metals and public sector banks, as well as increased retail investor participation. The report noted that India's macro indicators remained healthy, with steady tax collections, easing inflation, robust Purchasing Managers' Index (PMI) data, and rising foreign exchange reserves. These factors helped build confidence among both domestic and foreign investors. The broader market also showed encouraging signs of recovery. The Nifty 500 rose 3.5 per cent, while the Nifty 500 Equal Weight Index outperformed significantly with an 8.5 per cent jump. This suggests that gains were more evenly spread across stocks, rather than being limited to a few large players. Valuations have risen with this rally. The Nifty's price-to-earnings (PE) ratio climbed to 22.3 times, while the price-to-book (PB) ratio stood at 3.6 times. Though mid- and small-cap valuations remain above their five-year averages, PL noted they are still within reasonable one-year bands -- indicating normalisation rather than overheating. In terms of investment styles, quality, momentum, and high-beta stocks were the top performers in May. The Nifty 500 Equal Weight Index gained 8.5 per cent, outperforming the market-cap weighted index. High-beta and momentum strategies rose 8 per cent and 5 per cent respectively, supported by sectoral rotation and improving sentiment. Quality stocks also saw strong interest, gaining 8.5 per cent on the back of good earnings and safe-haven appeal, the report stated.
Time of India
5 days ago
- Business
- Time of India
Building a legacy: Financial planning tips for fathers of all ages
Step 1: Cultivate the discipline of saving Step 2: Allocate savings with a three-bucket system Bucket 1: Emergency reserve Bucket 2: Short-term goals Live Events Bucket 3: Long-term wealth creation Step 3: Establish clear financial decision-making rules Step 4: Evolve as your finances mature Summing it up A legacy beyond wealth This Father's Day , it is worth reflecting on one of the most enduring responsibilities fathers carry: ensuring the financial well-being of their families. Regardless of whether you are just embarking on your financial journey or are in a position to guide the next generation, adopting a structured approach to money management can have a lasting impact. Here is a streamlined framework to help you take control of your finances with clarity and discipline.A strong financial foundation begins with a consistent savings habit. Aim to set aside 20–30% of your monthly income, adjusting to your current capabilities. The objective is not perfection, but discipline. Establishing this habit enables long-term stability and provides a powerful example for your children and your savings into three distinct buckets allows for better clarity and purpose:Prioritize the creation of an emergency fund by allocating ~5% of your income until you accumulate at least six months of essential expenses. Place these funds in highly liquid, low-risk another ~5% to near-term needs such as education, home upgrades, or planned purchases. Debt mutual funds or fixed deposits are suitable the remaining ~10% (or more) toward long-term objectives such as retirement or legacy planning. Equity mutual funds—whether actively managed or passively tracking indices like Nifty 100 or Nifty Midcap 150—can be effective for wealth simple rules can prevent reactive or emotion-driven financial decisions:On receiving a windfall or bonus: Allocate at least half of it toward your three financial buckets before considering discretionary withdrawing funds: Access the emergency bucket for unforeseen expenses and the short-term bucket for pre-planned risky investments: Engage only if you're consistently saving above 30% of your income and limit such exposure to no more than 5% of your overall reaching a milestone—such as your long-term investments equating to five times your annual expenses—consider transitioning from a simple system to more advanced portfolio strategies. This includes asset allocation, risk diversification, and periodic rebalancing, often in collaboration with a trusted financial a habit to save at least 20% of your income. Keep it simple in the initial years of your career by following the 3 Bucket approach of Safety bucket, Short term bucket and Long term Pre-Defined Rules for investing new money, withdrawal and investing in high-risk investments. When your portfolio value is more than 5x of your annual spending, then focus more on Asset allocation, Diversification and framework will help you take charge of your financial decisions and keep the topic of money, saving and spending simple and less time-consuming. By embracing this framework, you not only secure your own financial future but also model enduring values for generations to come.
