Frontline indices are trading at all-time highs and if one were to look at the derivatives’ data for the May series, it looks like the rollovers have been strong and there is every indication that the long bets have been rolled over into the June series. The maximum rollover has been observed in Bank Nifty and Nifty which suggests that the markets could make a fresh high in June. There is strong momentum in equity markets no doubt; else it is rare for the markets to ignore comments made by the Reserve Bank of India (RBI) which had warned that the equity markets could be in a bubble zone.
The markets reacted to the RBI’s words of caution by making fresh lifetime highs. In normal circumstances, the markets pay heed to RBI’s comments very carefully and attempt to read between the lines. Meanwhile, the global markets are on a song and what is interesting is that the rally is broad-based which makes a majority of the investors richer, especially those who have shown a desire to make quick money in trending markets. Further, after a long spell of underperformance, small-caps are back with a vengeance as has been seen in their performance over the past 12 months. The table below highlights the outperformance of small-cap indices over the Sensex.
Small-Cap Performance
This story is from the June 07, 2021 edition of Dalal Street Investment Journal.
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This story is from the June 07, 2021 edition of Dalal Street Investment Journal.
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