Sensex Hits Record, Nifty Nears All-Time High: What Should Investors Do Next?
As Sensex hits a new all-time high and Nifty 50 is not far behind, market experts weigh in on what to expect.
Spurred by demand from foreign and domestic investors, including high net worth individuals, the S&P BSE Sensex hit a new all-time high on Wednesday, while the Nifty 50 drifted closer to a new record high.
The Sensex gained 0.41%, or 260 points, to hit its highest ever value of 63,588.31, while the Nifty 50 hovered around 18,800 levels, after reaching an intraday high of 18,875.90.
The Sensex and Nifty had both clocked an all-time high of 63,583.07 and 18,887.60, respectively, on Dec. 1, 2022.
Indian markets have rallied over the past few months—especially in the mid and small-cap space—amid demand from various categories of investors, given robust economic growth as compared with other emerging markets, according to market experts.
Strong earnings outlook, demand from the banking sector and private capex expectations also bolstered sentiment.
"Macro and micro sectors are part of this up-move, which is reflected by global trends and risk on mood for global indices," said Sudip Bandhopadhyay, group chairman of Inditrade Capital.
A Recap Of Sensex's Journey Over 43 Years
Here's what market experts are saying:
'Potential For Further Upward Movement'
The milestone suggests a positive sentiment among market participants and indicates the potential for further upward movement. However, it is essential to closely monitor the trading volumes to understand the market's behaviour as the market tends to face profit-booking activity near record high levels which remain usually short-lived.Arvinder Singh Nanda, Senior Vice President, Master Capital Services Ltd.
'Book Profits In Immediate Term'
The pace of the rally has slowed down over the last few weeks, but the underlying momentum is still strong. Traders can lighten up their long leveraged positions and book some profit in the immediate term. But medium- to long-term investors must continue to hold on to their positions and use dips to buy more.Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities
Sheth said that the pause in interest rates from both the U.S. Federal Reserve and the Reserve Bank of India is a "major sign of relief for corporates who were paying interest costs through their nose".
The all-time high private and government capital expenditure will boost infrastructure spending, creating a ripple effect and fuelling growth, Sheth said. The positive momentum should continue with the India and U.S. elections approaching.
'Believe In Long-Term Growth Story'
We continue to believe in the long-term growth story of the Indian equity market, supported by the emerging favourable structure, as increasing capex enables banks to improve credit growth.Naveen Kulkarni, Chief Investment Officer, Axis Securities
The Indian economy stands at a "sweet spot of growth" and remains stable against a volatile global economy, Kulkarni said.
The Indian market, according to him, has seen a solid rally in the last couple of months, especially in the mid- and small-cap space, led by positive FII flows, robust economic growth versus other emerging market countries, strong earnings outlook, robust demand across the sector, the banking sector in better shape, and private capex cycle expectations.
'Lot Of Growth Visibility For Three To Five Years'
Sensex looks attractive with investment coming in from the local economy, as seen by direct tax collections. Global businesses as well, as seen by the Prime Minister's visit with meetings with top-ranked CEOs, are fuelled by positive sentiment backed by global indices. There is a lot of growth visibility for the next three to five years that will attract investments."Deven Choksey, promoter of KRChoksey Group
'Sensex Earnings Kicker To Come From Margin Expansion'
The Sensex earnings kicker will come from expansion in margin as companies keep some of the gain from falling input costs and strong results from banks and non-banking finance companies. Valuations aren’t demanding at 15.5 times FY25 EPS, so if monsoons don’t play spoiler, 2023 will be a strong year for Indian equities. A lot of money is on the sidelines, and the carry trade is playing out in Japan. FPI money should keep flowing into India, with expected stable yields and a healthy rupee outlook.Amar Ambani, Head of Institutional Equities, YES Securities Ltd.
India stands out in a slowing world with a weakened China, Ambani said. The government’s infrastructure push, including digital public infra, and private consumption picking up through a rise in credit offtake, will help the "India story chug along", he said.
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