Can retail investors benefit from the current Bull market?

Sensex has achieved a new all-time high while Nifty breached the 12,000-mark. Retail investors can profit in the current market rally by branching out and relocating the investments

The stock market is on a bull run. Sensex experienced an all-time high of 40,606.91 as Nifty broke the 12,000-mark on Wednesday. Index heavyweights lifted following more than expected earnings and hope for peace between the US and China. Altogether, the BSE Sensex has surged over 3000 points, approximately 8.85% in the past three months.

The Head of Fundamental Research at Kotak Securities, Rusmik Oza, has revealed that present market rally can be associated with the resolution of the trade war and resurgence of FII flows into evolving markets and India. She also reported the prevailing profits, stating that Nifty-50 has surged from 10,650 to more than 11,900, mainly due to cut in tax rate and positive FII flows. The forward PE of Nifty-50 based on Bloomberg consensus estimates has moved up to 18.2x and is very close to its previous two peaks of approximately 19x.

What boosted the bullish run?

According to Prateek Pant, the head of products and solutions at Sanctum Wealth, the corporate tax cut announced by the Finance Minister and the start of government’s long list of reforms to revive the economy pumped the positive sentiments in the market. “Uptick in PAT numbers visible in initial companies declaring September quarter earnings and increased FII inflows are driving the current rally,” he added.

Guide for Retail Investors

The surge is extraordinarily beneficial for the investors, but the retail investors can also profit from the ongoing rally. Varying and reallocating their portfolios can turn to be of benefit. The experts’ guide that retail investors should hold their assets on to mid and small caps and lessen exposure in the large caps that have ascended disproportionately and developed notably rich valuations.

Pant mentioned that although the Sensex has moved up, “the breath has been quite negative,” which renders the retail investors an opportunity to buy new stocks. Ruzmik Oza states that more relevance for buying low and selling high is prevalent in cyclical stocks or B2B kind of companies. However, at present, the majority of the consumer-facing firms, trade at either peak or very rich valuations, therefore, investing in companies that are trading at the lower end can prove to be profitable to the retail investors.

BSE Sensex presented a fresh record high on Thursday, while Nifty topped the 12,000 marks. The investors encouraged the government’s ₹25,000 crore booster to strengthen the realty sector.