Nifty, Nifty Midcap, BSE Smallcap, BSE500 indices hit new high

Supportive global cues helped Nifty 50, Nifty Midcap from the National Stock Exchange (NSE) and S&P BSE Small-cap and S&P BSE500 index from the BSE (Bombay Stock Exchange) hit their respective high in intra-day deals on Monday.

While Nifty 50 index hit a new high of 10,167, surpassing its previous high of 10,115 made on August 1, 2017 in intra-day trade, the Nifty Midcap50 and Nifty Midcap100 indices, too, recorded high of 4,979 and 19,126 levels, respectively on the NSE.

The S&P BSE 500 index (14,192) and S&P BSE Small-cap index (16,866) were up nearly 1% each at their record high levels. By comparison, the benchmark S&P BSE Sensex hit an intra-day high of 32,508, and was 178 points or 0.55% away from its record high of 32,686 touched on August 2, 2017.

Markets, analysts say, have started to discount the geopolitical tensions as they rule out the possibility of a full-fledged war. Last week, North Korea fired another ballistic missile over Japan on Friday – its 15th missile test this year and the first since North Korea detonated its most powerful nuclear bomb to date on September 3.

 

“Asian indices opened mildly positive as markets look forward to the new week after seeing geopolitical tensions being discounted and use it as buying opportunities. Strength in the US Dollar saw the Japanese ‘Yen’ weaken and improve sentiment as ETF flows to see renewed strength in buying Asian equities,” India Infoline said in a client note.

As per provisional data available with the stock exchanges, the foreign portfolio investors or FPIs (Rs 419 crore) and domestic institutional investors or DIIs (Rs 126 crore) have been first time net buyers in equities during the month of September.

Thus far in current calendar year 2017 (CY27), mutual funds have made a record net inflow of Rs 76,656 crore in equity market, Sebi, data show. FPIs, too, have invested a net Rs 43,760 crore this far in Indian equities, data suggests.

OUTLOOK

Going ahead, experts remain optimistic on foreign fund flows into the Indian equity markets. Economic growth, they say, is the key factor driving them to invest here. That said, investors will also be keeping a tab on the upcoming results season to assess the impact of the goods and services tax (GST) bill, progress of monsoon and Reserve Bank of India’s (RBI’s) strategy on rates.

"The external flows are linked to the external risk appetite. The investors world over are chasing growth and India is a prime candidate in this context. We believe India can deliver on the growth promise and the visibility of growth is reasonably high," said Sanjay Mookim, India Equity Strategist, Bank of America-Merrill Lynch in a recent interview to Business Standard. READ THE INTERVIEW HERE

Domestic flows, too, are expected to stay healthy as the drop in interest rates across financial products will drive investors to put money in equities as an asset class, experts suggest. In this backdrop, analysts advise that investors stick to quality names in the large-cap, mid-and small-cap segments.

“While the domestic institutions and foreign investors are not investing aggressively, the retail investors are pouring in money through mutual funds and also directly in the stocks. We continue to remain optimistic on the long-term prospects of the domestic stock markets. However, in the short-term, we remain concerned especially in the over-valued stocks,” says G.Chokkalingam, founder & managing director, Equinomics Research.