Did someone say good inflation?
No doubt inflation is one of the catalysts for growth, but closely studying the inflation cycles reveals two faces of the same inflation, good and bad, says Ganeshram Jayaraman, of Spark Capital Advisors. He says, the first part is good inflation, reflecting healthy demand and is good for earnings growth. But the later part of the inflation can bruise the multiples, hurting earnings as well, he says while forewaring that we are still in the beginning stages of inflation.
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The valuation conundrum
Thanks to the broader rally in the markets, mid and small-cap stock prices have collectively soared resulting in high price multiples. What makes these spaces seem very expensive? It is because many companies in the mid and small-cap indices are in losses. The investors should strategise to steer clear of the bad names. A few fundamentally strong stocks from these spaces.
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Let’s join the momentum party!
A highly volatile environment is a dream playfield for momentum traders, higher volatility gives more structure to trade and the present situation is ideal for such traders. Talking about one of the best strategies to apply in momentum trading, top trader Vivek Bajaj backs techno-fundamental approach, a hybrid investment approach to pick stocks.
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Where to play defensive now?
Dalal Street veteran Kenneth Andrade talks about where to take some of the money off the table and play defensive. In an interview with ET Now, Andrade says that the chemical space has been in a structural bull run for the past 4-5 years. He says though the outlook in the space gets better every passing quarter, the fragmentation and noise is too much. He would book profits in the digital infra space as well.
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What risks to watch out for?
According to Mahesh Nandurkar, MD, Jefferies, key risks for equity markets come from rate outlook and inflation. Speaking about one indicator to watch out for, he says US five-year inflation is a good indicator to show how far we are from the inflation scare. This is one of the key risks to look at from a global perspective, he says.
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