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regular-article-logo Friday, 23 February 2024

Nifty crosses 20000 as retail investors, domestic institutions continue bet on equities

The feat came on a day Amfi data showed net inflows into equity mutual funds jumping to Rs 20,245.26 crore in August from Rs 7,626 crore in the previous month, buttressing the view that it is the domestic participants who are now contributing to the bull charge

Our Special Correspondent Mumbai Published 12.09.23, 10:27 AM
Representational image

Representational image File picture

The Nifty on Monday scaled Mount 20000 as hard-nosed retail investors and domestic institutions continued to bet on equities, unmindful of crude oil staying close to $90 per barrel and foreign portfolio investors (FPIs) turning into a subdued lot.

The broader index hit its all-time high of 20008.15, gaining 188.2 points, or 0.94 per cent, during the day. It ended a few points shy of the milestone at 19996.35, a gain of 176.40 points or 0.89 per cent.

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Peer Sensex was also buoyant as it leapt 528 points to regain the 67000 level.

The 30-share gauge rose 528.17 points or 0.79 per cent to settle at 67127.08.

During the day, it rallied 573.22 points or 0.86 per cent to 67172.13.

It was in November 1995 that Nifty 50 started its journey with a base value of 1000 — the index took 27 years, 10 months and 8 days to reach the 20000 mark.

The feat came on a day Amfi data showed net inflows into equity mutual funds jumping to Rs 20,245.26 crore in August from Rs 7,626 crore in the previous month, buttressing the view that it is the domestic participants who are now contributing to the bull charge.

NSDL data shows foreign investors to be net sellers of Rs 4,300 crore so far this month.

"The domestic markets began the day on a positive note, bolstered by the historic consensus achieved at the G20 summit, which instilled confidence among investors. Additionally, expectations of easing inflation, driven by a decline in vegetable prices, fuelled optimistic sentiment, leading to a market rally,” Vinod Nair, head of research at Geojit Financial Services, said.

Experts, however, remain divided on whether the current rally will be sustained.

“What is really impressive about Nifty reaching this all-time high level is that it has been driven mainly by local flows in recent months, while the FPI flow has been relatively subdued, partly due to limited global interest in Asia funds given the weak outlook for China which has a very high weightage in the region,’’ Pratik Gupta, CEO and co-head, Kotak Institutional Equities, said.

Gupta, however, added that the current gains in stock prices are a liquidity-driven rally, and investors should tread cautiously as valuations are expensive now with the Nifty 50 trading at a 2024-25 price-to-earnings ratio (P/E) ratio of over 18 times which is not cheap, even as several small caps and mid-caps are more expensive.

But, Siddarth Bhamre — EVP, head of research, Religare Broking, feels 20000 is here to stay. ``It may not be just a one-day print as the broader market has started to perform after a quiet 2022-23. India has emerged as a preferred investment destination as our growth is on track and inflation is under control,’’ he said.

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