Time To Book Profits As Sensex Hits Record Highs

The Sensex once again hit a new peak for the second successive week in a row crossing the 40,800 points mark. Nothing has changed fundamentally with the Indian economy expected to see a GDP that is well below the 5 per cent mark for the quarter ending Sept 30, 2019. The data is expected to be released on Nov 29, 2019.

The quarterly numbers and high frequency data hardly point to any indication that things are getting better. The festive season too has passed-by without any great fireworks.
Time to book profits

Markets take into consideration many factors, including global conditions, liquidity etc. This are some of the reasons the indices have scaled record highs. Global markets are on a roll as interest rates continues to be low and liquidity is immense.

This liquidity is finding its way into select stocks and that too heavyweights. So, if a few heavyweights like Reliance Industries and HDFC Bank start rallying, the indices start moving higher. Both these stocks are near record highs, which has pushed the Sensex to record levels. The broader markets have been left languishing.

If you have made money in select stocks, which you have bought at lower levels, it maybe time to book profits.

Look for dividend paying stocks

The broader markets offer good opportunities to buy into stocks that offer good dividend yields. Some stocks like Jagran Prakashan, Hindustan Zinc, Coal India and Karnataka Bank are a few stocks where the dividend yield could be tax free.

Remember, that dividends are tax free in the hands of the investors to the tune of Rs 10 lakhs. At the moment it is also a good idea to stay invested in good quality names.