V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, notes that the recent global market correction is triggered by profit booking, a normal and rational response to high valuations. While market trends can be predicted to some extent, the timing and specific triggers for corrections remain unpredictable.
Vijayakumar suggests that markets tend to overreact, and the sharp rise in the US market following the Federal Reserve's pivot may have been somewhat exaggerated. The marginal increase in the US bond yield reflects market concerns about the timing of the expected Fed rate cut.
In response to the current market scenario, Vijayakumar recommends a strategy of reallocating funds from overpriced mid and small-cap stocks to fairly-priced high-quality large-cap stocks, particularly focusing on leading banking names.
As of the latest update, the BSE Sensex is up 447 points at 71,803 points on Thursday. Notable gainers include NTPC, up 4%, Bajaj Finance, up more than 3%, and Indusind Bank and Tata Motors, both up more than 2%.
(With Agency Inputs)
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