The ongoing market rally has made investors richer by over Rs 13 lakh crore in the last six sessions. Market cap of BSE-listed firms rose to Rs 271.08 lakh crore on August 3 against Rs 257.55 lakh crore on July 26, 2022, translating into a gain of Rs 13.53 lakh crore during the period.
Similarly, Sensex rallied a huge 3,082 pts from July 6 to August 3 this year. The index which stood at 55,268 on Juny 26 ended at 58,350 in the previous session.
The 50-stock Nifty too zoomed 905 points to 17,388 on August 3 against 16,483 on July 26 this year. Strong macro data, FIIs inflows and lower commodity prices have helped Sensex and Nifty erase all their losses on a year-to-date basis.
Share Market Live: Sensex falls 308 pts, Nifty at 17,300; NTPC, SBI top losers
The Indian market seems to have overcome concerns of the ongoing Russia-Ukraine war and the possibility of further rate hikes by the US Federal Reserve to tame rising inflation.
Here’s a look at what experts say about the recent rally in the equity market and how far the indices are likely to rise during the rest of 2022.
Sneha Poddar, AVP Research, Broking & Distribution, Motilal Oswal Financial Services
“Strong momentum in the market has helped Nifty rally by nearly 1,000 points in the last 6 trading sessions. It has wiped out the entire decline for the calendar year till date. Strong macro data, FIIs turning positive, steady earnings and healthy progress in monsoon have been some of the key factors supporting the market. Even inflation seems to be peaking out and festive season is about to begin which should support demand and thus corporate earnings. On the global front, the markets so far has been shrugging off the increasing geo-political tension surrounding Taiwan. But any escalation in the tussle could result in profit booking and bouts of volatility. Further, with this recent rally, Nifty now trades at 20x FY23E, above its 10-year average, thus offering limited upside in the near term. Going forward, it could be a tug of war between domestic and global factors, which could determine the market direction.”
Paras Bothra, Chief Investment Officer, Ashika India Alfa Fund
“The welcome rally is certainly backed by optimism of lower commodity prices and thus lower inflationary pressure ahead and hence less aggressive central banks. However, major commodities from metals, crude oil, agri, container rates and many of the petrochemical and various raw material intermediates have started to come off their peaks due to demand concerns largely emanating from China’s COVID suppression policy and developed countries slowdown rhetoric. Thus, one needs to be sure whether inflation has indeed peaked and thus volatility may continue accordingly in the short term.
Besides, geopolitical risks have only increased in post COVID-19 world raising supply side challenges again, thankfully India has a nil chance of recession. Domestic economic indicators have been strong, be it GST collections or PMI numbers albeit business sentiments are a bit muted given geopolitical setup as well as some demand concerns on rural front, which would be largely addressed on a good monsoon induced farm output. Despite heavy reliance on imports, rupee has not depreciated that much against the dollar as other EME currencies. Besides, India has largely gained due to China plus 1 strategy and PLI schemes and that are expected to lead to a capex revival.”
Manoj Dalmia, founder and director, Proficient Equities
“Nifty had been continuing its bull run but at current levels, it might face some resistance and profit booking. The RBI bi-monthly policy is something which can be looked at and might affect the movement in the index. We can expect some retracement till 16,951 levels.”
Ravi Singh, vice president and head of Research, Share India
“The Indian benchmark indices are rallying taking cues from overall improvement in the Q1 earnings growth posted by several institutions so far. Also, all the major sectors are witnessing surge in volumes on the trigger of the value buying levels. Gains in the mid-and small-caps have been sharper with both these indexes surging around 12 per cent and 10 per cent recently. The FPIs turned net buyers in July after nine months of persistent selling which is a big boost for Indian market. The sell-off in the dollar index, pull back in US and other global indices are factors supporting the move in domestic markets. Now, the main focus would be on the RBI and OPEC meeting outcome, if favourable, may add another thrust to Sensex and Nifty bull run. The immediate target of Nifty and Sensex can be 17,580 and 59,500 respectively.”
