Porinju Expects Action in Small & Midcaps Now

Guru investor Porinju Veliyath expects markets to be very interesting ahead and will be a good time to invest in value. This reaction came right after Sensex scaled to its new high of 40,000 post-election polls suggesting BJP victory.

The rally swelled wealth of the investors by over Rs 2 lakh crore in morning trade on Thursday amid all-round buying in the equity market even where Nifty hit the 12,000 mark for the first time ever.

After initial hours of the vote count, the NDA led the tally with over 310 seats with the BJP leading in over 272 the magic figure. Porinju believes the NDA 2.0 is good for the country and investors will like it. Moreover, he does not expect any runaway rally in Nifty and Sensex from here on. He sees consolidation initially and expects a broader market in driving seat onwards.

According to him, the broader market is expected to move up now, with the much-ignored small caps, midcaps, and other deserving stocks. After a huge selloff in last five quarters several multibaggers are going to come up and investor should focus on them, he added.

The BSE Midcap and BSE Smallcap indices declined 18 and 25 percent respectively between January 1, 2018 and May 22, 2019, whereas BSE Sensex advanced 16 percent during the same period.

Porinju sees many challenges for the economy in the form of global and domestic headwinds however believes NDA government to tackle them with expertise.

Considering BJP manifesto which clearly promised a major infrastructure push, he advised watching infrastructure space for big gainers. The sector faced severe pressure in the last five years due to leveraged balance sheets, liquidity stress, and issues over working capital. Any change in finance ministery is another point of discussion ahead in the market he added.

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