The Street has a strange habit of being able to give justification or reason for every move. So, Friday’s sharp decline has been attributed to the FPI issue. In all this noise, we are probably forgetting one basic fact that valuations are expensive and even a bit of an adverse event can lead to sharp decline in individual stock price. At this point of time, one cannot rule out more profit booking because of global reasons which can bring more damage to stock prices. In such times, if one is taking fresh exposure to equity, ensure that there is some level of quality as far as the business and fundamentals are concerned. These selected stocks depict a strong upward trajectory in their overall average score which is based on five key pillars i.e. earnings, fundamentals, relative valuation, risk and price momentum. This implies that there has been a significant improvement in their market outlook in the given time frame.
