General Elections 2024: An upmove seems more likely than a correction ahead of polls, says Shauryam Gupta of Rupeezy

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Shauryam Gupta, CEO - Rupeezy, believes that given that the market has factored in the prevailing political climate, an upmove seems more probable than a market correction ahead of elections. Moreover, the market expert also advises investors to rebalance their portfolios towards large-cap stocks, which currently offer more compelling valuations than mid and smallcaps. Edited Excerpts: More than elections, the inflation data and the impending rate cuts will have a major impact on the markets.

Unfavorable macroeconomic indicators may bring a correction in the market. However, it's worth noting that the market appears to have already factored in the prevailing political climate. Given this context, an upmove seems more probable than a market correction at this juncture.

The small and mid-cap indices have corrected over 15 and 9 percent respectively, in the last month. Now this correction appears to be bottoming out. For a rally to happen in this space, a lot depends on the macroeconomic factors, especially the inflation data.

The risks in the small and midcaps have significantly increased owing to the debate of “froth" building up in the space. Several small-cap stocks have surged to lofty valuations, potentially outpacing their underlying financial performance. Given these heightened risks, investors may find it prudent to rebalance their portfolios towards large-cap stocks, which currently offer more compelling valuations.

The general elections are a major event with a significant impact on the markets, often accompanied by heightened volatility and considerable risks. In light of this, investors are advised to prioritise diligent risk management over the pursuit of high returns. It's prudent to allocate investments