Benchmark equity index NSE Nifty on Tuesday reclaimed the psychologically important 18,000-mark for the first time since April 5, 2022. Markets watchers believe that return of overseas investors have fuelled sentiment on D-Street. Meanwhile, the number of demat accounts in the country also surpassed the 10-crore mark last month. The figure has more than doubled since March 2020.
The 50-share broader index traded 129 points, or 0.72 per cent, up at 18,065.15 at around 1.30 pm (IST). On the other hand, the 30-share BSE Sensex was up over 440 points, or 0.73 per cent, at 60,556.
Sunil Damania, Chief Investment Officer, MarketsMojo said, “FIIs have come back strongly. Even the volume in the market has improved significantly. India Inc’s earnings and their commentary continue to make us believe that India is on a growth path.”
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At the same time, the recent report from Moody’s also suggests that global events will not impact India’s growth story. Foreign institutional investors (FII) have bought shares worth over Rs 60,000 crore since July 2022. They offloaded shares worth over Rs 2.50 lakh crore between October 2021 and June 2022.
So will the ongoing rally sustain? Considering the present market condition, Damania said, “The market will continue to do considering the levers for growth. India’s PLI scheme, China Plus One strategy, India as among the fastest growing economies in the world and inflation continuing to remain soft are all indicators that the market should do well. India is in a very sweet spot where growth would be high and inflation low. These two combined are rare to find in a volatile world economy. No fund manager can afford to ignore this.”
Therefore, the market analyst believes that 18,000 for Nifty is just a number and that the domestic indices will continue to rise even further.
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Pankaj Pandey, Head-Research, ICICIdirect said, “Market has been performing well over the last few quarters owing to huge liquidity, upward earnings cycle, economic revival owing to fading Covid-19 effect. However market participants should be wary of the rising inflation and resulting removal of liquidity from the system.”
“Rising inflation risk and hence withdrawal of ultra-easy monetary policy by global central banks (mainly Federal Reserve) may trigger a sharp rise in bond yields which can cause risk assets to correct sharply. Hence one can remain invested with a vigilant eye on the move in yields world over which can result in sharp 10-15 per cent correction from the current levels,” Pandey added.
