Sensex marks a new milestone at 70,000

Both the Sensex and the Nifty closed a tad off their intraday highs, gaining over one-tenth of a per cent each at 69,928.53 and 20,997.10. Foreign portfolio investors (FPIs) purchased shares worth a provisional ₹1,261.13 crore on Monday, while domestic institutional investors (DIIs) sold a net ₹1,032.92 crore.

A revival in FPI inflows since last month after a two-month hiatus has lifted market sentiment, with lenders such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank and State Bank of India being the index’s top volume counters. BSE’s market capitalization rose by $22.3 billion to $4.21 trillion, based on the flat closing rupee rate of 83.39 to the dollar. However, according to experts, the market might now take a breather, before rising again.

FPIs have invested a combined ₹39,500 crore in the two months through December so far, after selling shares worth ₹39,316 crore in the two months prior. DIIs, led by mutual funds, were leading the rally before the FPIs entered the scene. They net invested ₹20,113 crore since November.

So far this calendar year, FPIs have net invested ₹1.35 trillion in Indian stocks, according to National Securities Depository Ltd (NSDL). DIIs have net purchased shares worth ₹1.77 trillion, according to Bloomberg data.

“The India economy is better than it has been anytime in the past,” said Saurabh Mukherjea, founder and chief investment officer, Marcellus Investment Managers. “Combine that with political stability, peaking interest rates and the economy growing at 7%, and you have the perfect mix. The next two to three years are looking good for investors.”

Interestingly, retail and high-net-worth or HNI investors who buy directly from the secondary market, have begun hedging their share portfolios, while FPIs and DIIs have initiated cumulative long positions on indices like the Nifty and the Bank Nifty. For instance, while retail and HNI, which come under the National Stock Exchange’s (NSE) ‘client’ category, was cumulatively net short on the Nifty and the Bank Nifty by 46,381 contracts, FPIs were net long by 36,052 contracts and DIIs by 30,516 contracts.

“The FPIs who have initiated long positions in index funds are probably more the hedge fund kinds who want to ride the momentum,” said Rajesh Baheti, director, Crosseas Capital. “I think the markets could move sideways for a couple of days before resuming the upside momentum.”

Option sellers on BSE expect a 2% weekly range for the Sensex between 69,300 and 70,700, going by the formation of open interest (OI) at the 70,000-strike call and put option. Open interest measures the amount of money flowing into the market.

Gautam Duggad, head of research, Motilal Oswal Financial Services, said he remained “bullish” on the markets with Nifty’s one-year forward price to earnings multiple ruling at 18.9 times, which stands below the historic 20x. “I expect the large caps to begin outperforming the mid and small caps, going forward,” said Duggad.

The top five traded securities on the NSE on Monday were IRFC ( ₹2,186 crore), HDFC Bank ( ₹1,916 crore), IREDA, which hit the 20% upper circuit ( ₹1,546 crore), Adani Enterprises ( ₹1,452 crore) and Tata Power ( ₹1,335 crore).

“It took only 2.5 years for the Indian equity market to add market cap of $1 trillion and reach the new height of $4 trillion,” said said Sunny Agrawal, Head Equity Fundamental Research, SBI Securities. “This indeed is a landmark achievement. India is now pegged to become a $7-trillion economy by 2030. Going by the historical market cap to GDP ratio of 80-120%, India’s market cap is likely to hit $7 trillion by or prior to 2030 (assuming 100% market cap/GDP ratio).”

“The market cap can increase due to (a) increase in net valuation of the already listed universe and (b) new listings in the form of IPOs,” he added.

Milestone Alert!Livemint tops charts as the fastest growing news website in the world ???? Click here to know more.

Published: 11 Dec 2023, 11:26 PM IST