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Wednesday, October 27, 2021

Nifty-50’s performance is great but investors need to be cautious, know why experts are saying this

Will this Nifty celebration continue?

NSE’s index Nifty-50 outperformed the emerging markets index in terms of performance. It is way ahead of them in Nifty-50 in the span of three, six and one year. But investors should also be cautious of this spectacular rise of Nifty. International brokerage firm Jefferies has said in a report that if we look at the previous record, the performance of Nifty has been weak after reaching the top level. Hence Nifty-50 may underperform going forward. Jefferies has also made adjustments to its model portfolio. This portfolio is now looking defensive and it has added ITC. It has reduced the weight of two other stocks.

This performance will not last long: Jefferies

The Nifty-50 has more than doubled since hitting its all-time low in March. In fact, Nifty-50 has benefited from record foreign investment and double the number of retail investors in 2020. In March 2021, Nifty-50 had fallen to 7,511. Actually, due to COVID, the effect of selling in the global market was also affecting the domestic market. But earlier this month, the Nifty rallied 136 per cent to 17,792 from the March 2020 low. During this rally, Nifty outperformed the performance of the emerging market.

Jefferies says that according to its long-term daily rolling analysis, this performance of Nifty-50 will not be sustained for long. The analysts of Jefferies believe that the records show that after such performance, the Nifty has shown a decline. The brokerage house has a positive opinion on India’s economic activities but the valuation of the shares of domestic companies is very high and there is no scope for any upside. Risk-reward is not visible in favor of investors.

Shares of Coal India rally 27% in one month, reached 52-week peak, how much more can be earned in this stock now?

Added ITC to Portfolio

Jefferies has added ITC to its model portfolio. The stock has gained 17.5 per cent in the last one month. The brokerage firm has increased the target price of this stock to Rs 300. However, it has cut the weight of Tata Steel and State Bank of India.

(Article: Kshitij Bhargava)

(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)

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Nisha Chawlahttps://www.businesskhabar.com/
She is an expert in Banking, Finance and working with an international bank. She sharing her ideas and knowledge with Business Khabar.
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