Where To Invest Your Money As Sensex Crosses 71,000 Mark? A Strategic Investment Approach!

The market is bursting in back-to-back fresh record high levels. There is unrest in bulls as they roared across sectoral indices, taking the Sensex to new heights. Yes, Sensex is now above the 71,000 mark for the first time! It's another blockbuster rally with Sensex gaining by nearly a per cent in the day. But now that Sensex has crossed the 71k mark, where should investors park their money since the market is already expensive?

Bulls Riding Friday!

At the time of writing, Sensex traded at 71,147.10, up by 632.90 points or 0.90%. Just a few minutes ago, it zoomed to its lifetime high of 71,171.07.

It was IT stocks that had no bounds! Tech giants like HCL Tech, Infosys, Tata Consultancy Services (TCS), and Tech Mahindra skyrocketed by 3-5%. Meanwhile, the BSE IT index was up by a mind-boggling 1,354.70 points or 3.89%.

The reason behind why markets are bolstering heavily is because of steep downfall of US bond yield with 10-year benchmark now about 3.95%. This as per Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services has triggered large capital flows to emerging markets like India. Since large cap financials and IT are reasonably valued and have been FII's favourite sectors, these segments will continue to do well.

Not just that midcap and smallcap indexes on BSE touched an all-time high of 36,421.02 and 42,219.19 respectively.

There were more stocks that saw buying than selling, some even touching new 52-week highs and upper circuits.

Of the total 3,835 stocks listed on BSE, 2,033 stocks had advanced on December 15 and 1,664 stocks declined, while 138 stocks were unchanged. Meanwhile, a total of 364 stocks hit new 52-week highs and 14 stocks touched new 52-week lows. A total of 294 stocks touched their upper circuit levels which meant that there were more buyers but not sellers. But also 223 stocks touched their lower circuits which meant there were several sellers but not buyers.

Moreover, BSE-listed firms' market cap crossed a new peak level of more than Rs 358 lakh crore.

Sensex A Multibagger?

The 30-scrip benchmark is moving to become a multi-bagger in its 5-year performance. It's only a little over 1% to hit 100% growth in 5 years.

Due to its breathtaking bullish performance, Sensex's year-to-date upside is over 16%, while its yearly gains are over 15%. But in 5-years, Sensex has shot up by a huge 98%.

5-years ago, on December 14, 2018, Sensex was merely at 35,962.93. And since then, the benchmark has nearly doubled by 35,208.14 or 97.90% as of now.

Where to invest your money with Sensex now above 71,000?

Kaushik Dani Fund Manager - PMS, Abans Investment Managers said, that markets, especially mid and small caps have given superlative returns in the last one year. Thus it is important to have a balanced asset allocation.

He guided that one should be agnostic towards any Market Cap bias and thus prefer multi-cap or flexi-cap category investments.

Meanwhile, upon Sensex hitting the 71,000 level, Manish Chowdhury, Head of Research, StoxBox likes the power sector, while railways and real estate stocks are seen as good bets for medium-term to long-term angles. In large caps, he specifically likes HDFC Bank and Bharti Airtel.

StoxBox analyst accordingly said, "We believe that there is still juice left in large-cap stocks. HDFC Bank and Bharti Airtel look good to us and we expect around 20% returns on these counters over a one-year time period. As far as mid and small-cap space is concerned, we believe that power sector still offers comfort on the valuation front, while real estate and railways sector provide ample earnings visibility from a medium-to-long-term perspective."

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.