Sensex rallies over 4,000 points in August; check out the factors

The benchmark BSE Sensex has climbed more than 4,000 points in August and scaled the 57,000-mark for the first time on August 31. The 30-share index jumped to an all-time high of 57,290.76 from 52,586.84 on July 30 last month. On the other hand, the BSE Midcap index gained 2.46% during the month, while the Smallcap index declined 0.35%. Following the rally on Dalal Street, the market capitalisation of the BSE-listed firms also jumped to an all-time high of over Rs 248 lakh crore in the afternoon trade.

Will largecaps continue to outpace in September?

Rahul Shah of Motilal Oswal said that largecaps in near-term should do well. “Investors have preferred to book some profit in the midcap and largecaps after the rally since March 2020. However, we believe midcap will continue to outperform after over a couple of quarters. Investors should wait for Q2 results.”

He further added any flow of money moving from primary to the secondary sector will further give direction to the market.

“There is still a lot of room available for the broader market,” Shah said, adding new investors should consult their financial advisors or adopt a mutual fund route to enter the market.

Commenting on the Ami Organics and Vijaya Diagnostics IPO which are going to hit the market on September 1, Shah said that investors can consider these IPOs for listing gains only.

For stock-specific investors, he advised investors to bet on Canara Bank with a target price of Rs 225 and Larsen & Toubro (Target price: Rs 1,950).

“We like L&T as the government is continuously thinking about the capital goods sector. Asset monetisation and government thrust for infrastructure will further support the counter,” he added.