 "Sensex goes past 65,000 as FPIs keep tap running; Nifty at fresh high")
The Sensex scaled past the 65,000 mark for the first time and the Nifty50 logged a fresh all-time high on Monday as strong inflows from overseas investors remained unabated.
Gaining for a fifth straight session, the Nifty50 ended at 19,323, following a gain of 134 points, or 0.7 per cent. The Sensex notched up its fourth daily advance, closing at 65,205 -- up 487 points, or 0.8 per cent.
Foreign portfolio investors (FPIs) bought shares worth Rs. 1,996 crore on Monday, after pouring in Rs. 52,366 crore ($6.4 billion) last month — most since August 2022. The cumulative market cap of all listed companies on the BSE closed at a new record of Rs. 298.2 trillion, just shy of the Rs. 300-trillion mark.
According to experts, the extended rally in the markets is a result of an improving growth scenario and stable earnings trajectory in India.
“The Indian economy is currently showing stable performance and the conditions for long-term growth have improved, despite global chaos caused by changes in interest rates. Earnings trajectory is stable and there is supportive flow into equities,” said Neelesh Surana, chief investment officer (CIO), Mirae Asset Investment Managers.
“There may not be any large undervalued opportunity, but the market overall can still offer decent returns in the long term,” he said.
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From a low of 57,085 in March, the benchmark Sensex has now rallied 14 per cent, with nearly 4 per cent gains coming in the past four trading sessions.
“The Indian economy is enjoying a ‘Goldilocks’ phase, with growth momentum holding up. Inflation has moderated to near the RBI’s target of 4 per cent, and the rupee remains stable against the backdrop of an improved current account deficit outlook and robust equity markets,” said Kaushik Das, chief economist, India & South Asia, Deutsche Bank.
Experts said domestic factors, such as strong GST collection numbers, improvement in the banking sector’s loan ratio, and decent auto sales numbers for June added to the bullish undertone.
The Indian markets also took positive cues from Asian markets and strong gains made by Wall Street on Friday. Better-than-expected economic data in China and sharp gains in technology stocks added to the positive sentiment. The Caixin manufacturing purchasing managers’ index pointed to resilient factory activity in China, helping assuage fears of a feeble economic recovery in the world’s second-largest economy.
On a year-to-date (YTD) basis, the Indian markets have now gained over 6 per cent. The gains are pale in comparison with that in the US, Europe, and Japan, which are up between 15 per cent and 30 per cent. India, however, has outperformed regional peers, such as China, Indonesia, Thailand, and Malaysia, where YTD returns are mostly negative.
“India continues to maintain its rapid economic growth and remains one of the fastest-growing major global economies, driven by resilient domestic demand, strong private sector investment, and healthy balance sheets of most Indian companies,” said Robert Jenkins, global head, Lipper Research.
On Friday, Reliance Industries, ITC, and HDFC twins did all the heavy lifting, accounting for the bulk of the index gains.
Reliance Industries (up 2.5 per cent) was the top performer on the Sensex and alone made a 195-point contribution to the index gains. ITC also rose 2.5 per cent to touch a new lifetime high. Overall, the market breadth was mixed with an equal number of stocks advancing and declining.