As the Nifty reached a record high of 22,000 points, cautionary advice from brokerages has emerged, recommending profit booking in the small-cap space.
Pranav Haridasan, MD and CEO at Axis Securities, highlighted that the recent surge in the IT sector leading the Nifty rally this month, particularly in the last two trading sessions, has been fueled by positive results and attractive valuations. However, he urged caution, noting that sharp rallies may not be sustainable. Haridasan suggested a near-term cautious outlook and recommended profit booking, especially in areas showing exuberance, particularly in the small-cap segment.
Paras Matalia, Fund Manager at SAMCO Mutual Fund, observed the powerful setup for 2023 with 29 new 52-week highs in the previous calendar year, indicating a mature bull market. He advised investors to ride the current market momentum while staying vigilant for any signs of weakness.
Vinod Nair, Head of Research at Geojit Financial Services, pointed out that the market's momentum was driven by the IT index's uptick, reflecting optimism about increased discretionary spending and strong deal wins. He also highlighted the impact of the lower US bond yields as investors anticipate the start of the Federal Reserve's easing cycle in March. Nair anticipated a more measured approach from investors, particularly with the release of Chinese GDP and UK inflation data in the upcoming week.
(With Agency Inputs)
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