The BSE Sensex mounted the 60,000-mark on September 24, powered by a rally across sectors, barring auto. The improvement in risk appetite after the easing of the Evergrande crisis pushed the market to new highs.
The momentum, which started after the recovery from the COVID crisis in April 2020, has continued, with intermittent corrections and consolidations, which are always good for a healthy forward movement.
Several measures taken by the government and the RBI to bring growth back on track, the low interest-rate environment, healthy corporate earnings growth, improving economic growth, pace of vaccination, and availability of ample global liquidity helped the market climb new milestones in the last several quarters.
The benchmark Sensex hit the 50,000-mark for the first time on January 21 this year. Since then, it has taken eight months to hit the 60,000 level. On the other side, the Nifty50 is inching towards the 18,000-mark, after hitting a new high of 17,947.65 today.
"It's a big achievement for India that Sensex has crossed the 60,000-mark. Especially when uncertainties are mounting in world markets, such performance is remarkable. To date, it was backed by DII buying in equities, but now, fresh interest from FIIs as well is pulling the market upwards," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
The Nifty50 traded at 17,885.20, with gains of 62.20 points and the BSE Sensex holding the 60,000 mark, rising 266.75 points to 60,152.11 at the time of publishing this copy.
Gainers in the journey from 50,000 to 60,000
In the journey from 50,000 to 60,000, 42 stocks in the BSE500 index have delivered multibagger returns. They include JSW Energy, Balaji Amines, Happiest Minds Technologies, Adani Total Gas, Adani Transmission, Linde India, Gujarat Fluorochemicals, Adani Enterprises, Mindtree, Deepak Fertilizers, IRCTC and KPIT Technologies. They gained 150-370 percent in the last eight months.
Further, Indian Energy Exchange, Deepak Nitrite, IIFL Finance, DCM Shriram, Persistent Systems, KPR Mill, HEG, HFCL, Lux Industries, Century Textiles, Welspun India, eClerx Services, Max Healthcare Institute, Tata Elxsi, Sonata Software, Coforge, Mahindra Lifespace Developers, Zensar Technologies, Carborundum Universal, Redington (India), Cyient, Intellect Design Arena, MphasiS, Shriram City Union Finance, BASF India, Bajaj Finserv, Firstsource Solutions, NOCIL, VRL Logistics and Alkyl Amines Chemicals rallied 100-149 percent.
Another 119 stocks registered gains between 50 percent and 99 percent. They include JK Lakshmi Cement, Tata Steel, Bajaj Electricals, Hindalco Industries, UTI Asset Management Company, NALCO, PNC Infratech, APL Apollo Tubes, CAMS, Polycab India, L&T Technology Services, Oil India, KSB, Tata Coffee, Adani Power, Piramal Enterprises, Vedanta, Gland Pharma, Birlasoft, Tata Power, JSW Steel, Rossari Biotech, ICICI Securities, Sobha, Prestige Estates Projects, Tata Chemicals, Finolex Industries, Bharat Electronics, Bajaj Finance, State Bank of India, L&T Infotech, Tech Mahindra, Wipro, Jubilant Foodworks, Varun Beverages, and Mahindra Logistics.
Why a further rally is possible
Going ahead, corporate earnings and economic data will support market momentum and any sharp correction, if it takes place, will only be because of global events. They believe the market is also not worried about Fed tapering, especially after the Fed hint that the tapering will be gradual.
"In the coming months, the news flow on corporate earnings would also help the market to rally further. Investors are reluctant to invest and also to take profit whenever we see such an uninterrupted rally in the market," said Shrikant Chouhan.
‘Buy only select stocks’
Even at 60,000 levels, his advice for investors is to buy select stocks (strong companies in terms of managing and growing companies) with a medium- to long-term view. "Buying is advisable in tranches/parts. Do not lock your entire funds at current levels," he said.
The broader markets also participated in the journey, outshining the benchmark indices by a wide margin. The BSE Midcap index gained 35 percent and Smallcap index jumped 51 percent in the last eight months, against 21 percent gains in the BSE Sensex.
"In the near term, the broader indices are expected to continue inching upwards. Domestic factors, like a strong commitment to economic growth by the government and the central bank, coupled with a meaningful pace of public health improvement and the administration's efforts to stimulate the economy back through initiatives like the bad bank are being reciprocated by strong investor sentiments," said Nirav Karkera, Head of Research, Fisdom.
He further said analyst estimates of a continued uptick in corporate earnings on the back of regained consumerism and restoration of disrupted supply chains are further bolstering investment appetite.
"However, risks of a faster rollback of systemic liquidity or a disappointment in corporate earnings warrant caution. Any shock in the form of materialisation of looming risks could snowball into a correction faster than expected," he said.
He feels now is a great time for investors to review portfolios and align assets with targeted allocations.
Disclaimer: The views and investment tips by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.
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