ET500: Rally 4.0 to give laggards a leg-up | The other side of chaos | Stocks to ride the vaccine theme

THE ECONOMIC TIMES Tue, Dec 22, 2020 | 01:33 PM IST ET500 2020

Rally 4.0 to give laggards a leg up Pharma, IT, auto and financials rose in three phases from the lows of March. Next in line may be realty, PSUs and capital goods. Covid gave a boost to margins. Will it sustain? India Inc is leaving no stone unturned to protect margins amid topline pressure but not all companies would be able to retain the edge Building the nest egg, passively The clout of passive funds is gradually rising among retail investors offering some visible benefits Covid scare a shot in the arm for healthcare Vaccines to combat the pandemic and a thrust on diagnostics are near-term drivers. An uptick in acute drugs and business as usual at hospitals may keep investors hooked. Logistics, power, insurance and tech are top structural growth bets Well-run and agile businesses that are sectoral leaders and proxy plays for a changing India hold long-term promise. Homebuyers and the homebound give ancillaries trigger for a rebound Recovery in housing sales and work-from-home make improvement products cos — paints, tiles, pipes, sanitaryware and woodwork — good picks. Hotels, multiplexes and logistics set to ride the vaccine theme Fund managers are buying into battered but fundamentally strong stocks from these sectors primed for a demand revival Buy gold on dips through SGBs, ETFs The Sovereign Gold Bond is a better option in a falling price environment given the annual interest, while ETFs have higher liquidity. The other side of chaos Caught between the hope of a vaccine and fear of a stronger strain of the virus, investors are exposed to fresh bouts of volatility. The way to navigate these uncertain times is to allocate wisely across companies with agility and strong fundamentals Crypto assets lure the wealthy, but will the allure last? Wealth managers doubt their role as a hedge on par with gold given the volatility and the margin of safety at elevated prices.

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