The stock market indices are on a bullish drive. At 2.37 PM, the Sensex was at 58,292.44, up 162.49 (0.28 percent), while the Nifty50 stood at 17,378.50, up 54.90 (0.32 percent).
After hitting an all-time high of 58,515.85 at the opening bell, the BSE Sensex was trading 274.79 points or 0.47 per cent higher at 58,404.74, while the broader NSE Nifty surged 74.70 points or 0.43 per cent to 17,398.30. The index touched an intra-day high of 17,429.55 in initial deals.
The Sensex closed 166.96 points (0.29 percent) up at 58,296.91 while the broader Nifty50 was up 54.20 points (0.31 percent) at 17,377.80.
What is propelling the market in the manner it is soaring in the past few days? The equity market witnessed a sharp surge last week amidst strong FPIs inflow and upbeat sentiments over liquidity. The market was up by 3.6 percent during the last week.
Equities aided by tailwinds
Equity markets keep rising aided by a lot of tailwinds, said Deepak Jasani, Head-Retail Research, HDFC Securities. Low interest rates, lack of alternative attractive investment avenues, encouraging Q1FY22 numbers, return of FPI inflows are some of the reasons for the bullishness in the markets, he said. Besides, the macro numbers lately are also encouraging. Government policy measures are creating the groundwork for growth over the medium-term, Jasani said.
Vivek Kaul, author of Easy Money Trilogy, said, "the foreign institutional investors are back in the stock market. Just in the first three days of September, they invested Rs 4,787 crore in Indian stocks. This after they invested Rs 2,083 crore in August and sold stocks worth Rs 11,308 crore in July. Clearly, the fear of missing out has caught up with many such investors.
"The same is true about many retail investors. Having seen the stock market continuously going up for the past 16-17 months, they are coming in droves. The proof of this lies in the massive amount of money that has been raised by the new equity funds of mutual funds."
Satish Kumar, Research Analyst, Choice Broking, said strong FPIs inflow, surplus liquidity in the global market, pick-up in vaccination drive and continued improvement in high frequency data are key factors credited for upbeat sentiments.
US Fed latest dovish comments on interest rate hike also boosted global investors sentiments helping to trigger fresh rally in India.
'Small correction' due
The Nifty is overbought on an extremely short-term basis, said Jasani. Hence a 'small correction' is due in this truncated week or probably towards the end of the week. However, the overall mood is still mildly positive and stock-specific moves may continue. The advance decline ratio needs to improve sustainably for improving the sentiments even further, he said.
Should investors invest in the market? Satish Kumar of Choice Broking said, "As the market is trading at premium valuation, margin of safety for investors remains low at this time. Thereby investors are advised to cautiously pick the stocks. Investors should invest in fundamentally strong businesses available at reasonable valuation."
