Many stocks in this segment have run up too much too fast and have shot up by more than 100 per cent in just a few weeks.
In recent weeks, the stock market has witnessed a remarkable surge in many sectors associated with Ayodhya, the sacred city in India known for its religious and cultural significance. To subscribe please click tau.id/2iy6f and access our live channel.
Investors have been astounded as numerous stocks within these sectors have experienced an unprecedented uptrend, with gains surpassing the 100% mark in just a few weeks.
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The surge in Ayodhya-related sectors can be attributed to a combination of factors, including significant developments in infrastructure projects, a renewed interest in religious tourism, and positive sentiment surrounding the cultural and historical significance of Ayodhya.
One of the primary drivers behind the surge is the rapid progress of the Ayodhya development projects. These factors have sparked a wave of investor optimism, leading to substantial gains in various stocks.
The potential for tourism-related business is enormous and has attracted investors into hotel, travel and other tourism-related stocks, V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.
While appreciating the long-term potential of investment, investors should not go overboard chasing these stocks that have elevated prices.
This mid and small cap frenzy is partly driven by the newbie retail investors who are chasing these stocks and partly by mid and small cap mutual funds to which inflows are strong and sustaining.
Broadly, the valuation of the mid and small cap segments are too high, unjustified, almost in frothy territory. Also, this is a sentiment-driven rally triggered by retail exuberance.
Ayodhya tourism has excellent long-term prospects, investors have to be careful about the valuations. Large caps in IT, capital goods, telecom and selective private sector banks are safer bets now.
