Mumbai, July 29 (NationPress) The ongoing consolidation in the market resembles the middle overs in cricket, emphasizing the need for discipline and strategy. Investors are advised to avoid unnecessary risks and focus on strengthening their portfolios in anticipation of a market rally, according to a report released on Tuesday.

Investors should refrain from increasing their equity portfolio allocation, maintaining 65% in large-cap stocks, while allocating up to 35% in mid- and small-cap sectors, as recommended by Motilal Oswal Private Wealth.

For those with a lower allocation to equities, lump-sum investments in hybrid funds could be beneficial. A phased investment strategy through SIPs or STPs is suggested for those targeting pure equity categories, the report noted.

With limited potential for capital gains, the current softening of yields presents an opportunity to gradually lessen exposure to long-term bonds maturing in 10 to 15 years.

As the yield curve steepens due to RBI's policy adjustments and liquidity measures, investors might consider being overweight on accrual strategies across various credit classes by investing in private credit strategies, InvITs, and select NCDs, as stated in the report. The report also highlighted that arbitrage funds and income-plus-arbitrage FoF serve as tax-efficient fixed-income options.

Silver is regarded as a tactical investment but should not replace gold, according to the report. The MOPW report maintains a neutral stance on gold.

India is characterized as a high-scoring pitch with robust macroeconomic conditions, conducive to a long-term strategy, the report indicated.

The correction period in March-April 2025 mirrors the initial PowerPlay overs in cricket, where being aggressive was a safe choice. In contrast, the present consolidation phase is akin to “middle overs” in a 50-over match.

During the middle overs, discipline and strategy prevail over reckless aggression. Therefore, investors should concentrate on building their portfolios rather than taking undue risks, the brokerage emphasized.

Despite facing foreign institutional investor outflows and elevated valuations across various sectors, viable growth opportunities remain. Additionally, a stable and soft dollar is likely to positively influence foreign institutional investor flows, the report explained.

India’s services exports, production-linked incentive (PLI) benefits, free trade agreements (FTA) with other nations, and favorable crude prices are projected to mitigate the effects of tariff impositions. Even though the macroeconomic landscape appears stable, high-frequency indicators suggest a mixed outlook in the near term.

aaron/na