Stock Market: Quarterly results, bond yields and FPI investment in international market will determine the movement of equity market in the short to medium term.
Stock Market: In FY 2021, the Indian stock market has given excellent returns despite the Corona epidemic and its impact on the economy. But with the rising Kovid-19 cases in the country, is it still right to hold equity? absolutely. Analysts believe that the benchmark equity index can achieve 15 per cent growth in the new financial year. This is the reason why they are advising investors to keep investing in equity as compared to other asset classes.
Gaurav Garg, Head of Research, CapitalWaya Global Research, says that investors below 35 years can invest in equities for a long period. He believes that such investors can invest 65 per cent directly in equity, 15 per cent in fixed income options and the rest in exposure to gold. With age, investment in equity should be reduced and allocation towards debt category should be increased.
In the financial year 2021, the Sensex has risen by 68 percent i.e. 20,000 points. Market analysts have described the year 2020-21 as a roller-coaster ride due to the Corona crisis – both in domestic and global markets. The way the market has recovered towards the end of the financial year, the investors have earned tremendous earnings. On the other hand, gold prices have climbed only 8 percent. The price of 10 grams of gold has risen by 8 percent to Rs 44,106. Gold made a record of Rs 55,922 per 10 grams.
The 30-share index Sensex closed at 49,545 on the first day of FY 2021-22 with a gain of 36 points or, say, 0.07 per cent. Garg says that the index could go up to 56,300 by the end of this financial year.
The quarterly results of the companies, bond yields and FPI investments in the international market will determine the movement of the equity market in the short to medium term, according to Rusmit Oza, head of fundamental research and executive vice president, Kotak Securities. 60 per cent investment can be kept in largecap and 20-20 per cent in midcap and smallcap. For the financial year 2021-22, he has advised to invest in SBI Life Insurance, Bharti Airtel, L&T, Kalpataru Power Transmission and Escorts.
Should investors turn to fixed deposits in such a sluggish interest rate environment? FYP’s research head Kopal Kavalireddy says that asset allocation is different for every investor – depending on their age, risk appetite, investment perspective, economic potential. In the current situation, investment options are limited.
In the last 18 months, the interest rate on a 1-year fixed deposit has come down to 5 per cent from the declining interest rate, while inflation has gone up to 6 per cent. The Reserve Bank and the government have given priority to growth, so that in FY 2021-22, interest rates will remain down. In such a situation, fixed deposits can be ignored for investment in the near future.
Even though the asset allocation is based on the risk profile of the investor, generally invested 60% in equity and 40% in other assets such as fixed income and gold, says Gaurav Dua, Capital Market Strategy Head and SVP, Sharekhan of BNP Paribas. May go.
