Samvat 2077: Investors must look for safety first, tone down expectations

Given the sharp volatility, it is preferable to stick to leaders or top-tier players across sectors as they consolidate their position and gain market share

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Given the sharp rebound since April, investors must tone down near-term expectations

Small-cap indices have been the clear winners in Samvat 2076, so far, with double-digit returns, even as the benchmark indices struggled to deliver with returns under 3 per cent. This information, however, hides the fact that only two sectors — information technology and health care — were the clear outperformers with returns exceeding 40 per cent each. Hit by the pandemic, most other sectors ended up destroying value, delivering negative returns. Given the sharp volatility, pressure on cash flows, and worries of a second wave of infections, it is preferable to stick to leaders ...