Expect market to give up more gains as near-term risks are high:Sandip Sabharwal

economictimes.indiatimes.com:

Sandip Sabharwal, asksandipsabharwal.com, says “the overall small and midcap universe is richly valued. On top of that, there is risk in the markets and globally also we have seen significant run-ups in markets, huge amounts of record inflows into funds in recent weeks. This typically indicates that some short-term top will be formed, which should give up in my view 5% to 7% from the top.”

What have you made of this temporary blip that we saw yesterday and now the recovery thereof or was it really a temporary blip or do you think we have seen the peak in yesterday's high for this year?
Sandip Sabharwal: This year it is very unlikely because it is just seven-eight days to go.

Next year, we will surely make new highs. But in the near term, I would still be concerned because the froth in the market is too high, especially driven by very highly priced IPOs and the kind of listings they are getting and the valuation at which most of these companies are trading. The risks in the markets in the near term are high.

We should still see the markets give up more gains.

There is froth in the IPO market because we were culling some traditional historical data and in 2021, we had more IPOs than what you have seen this year. The money raised as well was much higher and that is the time when you had your Nykaa, Paytm, PB Fintech, etc, list?
Sandip Sabharwal: There were fewer companies and maybe a larger size. Now, there are smaller companies with valuations which are very high as compared to even any comparable listed company.

So, for example, let us say this week's listing, something like a DOMS Industry. It is a stationary company with long-term growth prospects of 5% to 10%, trading at 80 times earnings. These sorts of valuations