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It was a trading day where the market was optimistic on large caps and non-interest rate sensitive stocks and pessimistic on mid cap, small cap and rate sensitive stocks.
The Sensex gained 154 points to close at 16,939.28 while the Nifty put on 48.4 points to end at 5,098.35.
Rate sensitive stocks were sold ahead of Tuesday’s monetary policy as the street is expecting another hawkish stance by RBI.
“Buy large cap stocks as they have entered a value zone,” said the Head of Research of a multinational brokerage. The Sensex is trading at a forward price to earnings ratio of 13 times and is expected to bottom out at 12 times with stress levels at 10 times.”
PE ratio is the number of years required for the earnings to pay back the purchase price. A higher PE indicates that investors are willing to pay a higher price to buy Sensex stocks.
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