74,000: Milestone above which Sensex closed for the first time on March 6
The Sensex closed at 74,085.99 on March 6. One factor that drove this large cap index up was that many investors reduced their exposure to small and mid caps and shifted to large-cap stocks. Many investors also undertook sector rotation and moved to banking, which has not risen as much as the other sectors over the past couple of months. Positive sentiment within the market was also fuelled by GDP data.
In his Congressional testimony, US Federal Reserve chair Jerome Powell said there could be interest rate if inflation stays under control.
According to experts, investors should be prepared for volatility in the markets until the general election. Stretched valuations could act as a deterrent. The action is expected to shift towards large cap stocks, which have run up much less over the past year compared to mid- and small cap stocks. The Securities and Exchange Board of India’s recent advisory against midcaps and smallcaps has made investors cautious about these segments. They are likely to remain under pressure in the near future.
Investors who are overweight on mid- and small caps should book profits in these segments. They should also ensure that their portfolios are diversified across asset classes, which means they should have exposure to fixed income and gold as well.
First Published: Mar 08 2024 | 11:23 AM IST