NEW DELHI: The 50-share NSE benchmark index- Nifty 50 for the first time crossed the 19,500 level on Thursday and is now eyeing to breach the milestone of 20,000 as the ongoing bull run, defying valuation concerns, is showing no signs of corrections amid huge fund inflow from foreign portfolio investors (FPIs).
The Nifty50 touched an intraday high of 19,512 on Thursday before setting 98.80 points higher at 19,497.30, while the BSE Sensex advanced 339.60 points to reach 65,785.64. It has taken only 5 sessions for the Nifty50 to surge 19,000 to 19,500.
“If you look at the FPI flows, it gives you the confidence of achieving the 20,000 mark in this ongoing rally. We are also seeing support from the US markets. Further rally in the BFSI sector can drive up the markets,” said Divam Sharma, Founder at Green Portfolio.
On the back of improving global cues and upbeat domestic macroeconomy numbers, Sensex and Nifty have surged over 13% each since March 28. FPIs have been very bullish on India and had pumped in over Rs 90,000 crore in equities in May and June. FPIs were again net buyers on Thursday as they purchased shares worth Rs 2,259 crore, showed depository data.
Going forward, however, there might be some challenges for the domestic equity market. US equity tanked sharply on Thursday with Dow Jone dropping 500 points or 1.5% as rate hike fears accelerated again. This may impact the Indian market as well.
“Factors that can trigger the correction include a correction in US markets; geopolitical worries around trade war or around Russia; issues coming from upcoming parliament session in India, US Fed policy and subsequent commentary and any negative surprises in the Q1 results,” said Sharma of Green Portfolio.
Deepak Jasani, Head of Retail Research, at HDFC Securities, said that Nifty has risen for 8 consecutive sessions, but now seems to be ripe for some sideways move or correction. “In every results season, we witness stock or sector rotation while the nifty stops trending majorly. Though 20,000 is not very far, a small correction ahead of it may be healthy for all.”
On FPIs, Jasani noted that despite expectations of interest rate hikes in the developed economies that could affect global risk appetite, flows into India may not get impacted much due to the unique attraction of the Indian story.