The benchmark BSE Sensex hit yet another lifetime high of 32,131.92 points while broader NSE Nifty 50 scaled a new peak of 9,920.3 points in the late morning trade on Monday, led by huge gains in major information technology companies. This is the third straight trading session in which the Indian stock markets claimed the new record levels.
IT giants helped push the benchmark indices to record highs with Wipro leading the gains, rising as much as 5.5% to Rs 273.9 after saying that it will consider a share buyback at its board meeting later on Thursday. India’s second largest IT company Infosys gained 2% to Rs 991.2 after raising its sales forecast on Friday.
Sectoral indices of NSE, IT, bank, auto, media, metal, private bank, realty gained up to 1.2% while Nifty FMCG trade lower 1.65% at 27,406.15 points. Foreign portfolio investors (FPIs) bought shares worth a net Rs 673.56 crore last Friday and domestic institutional investors (DIIs) net sold shares worth Rs 136.27 crore, as per provisional data.
Earlier last week, domestic markets rallied to hit record highs with BSE Sensex gaining over 660 points while NSE Nifty 50 added 220 points to clock the lifetime highs at 32,109.75 points and 9913.3 points respectively.
Indian markets are on a continuous upsurge from the last two weeks owing to several factors helping the economy and boost the investor confidence. Despite some hiccups, India is still one of the fastest growing big economies in the world. The current account deficit and fiscal deficit are under control. Retail inflation has fallen to 1.54%. The demonetisation exercise, contrary to expectations, has not scarred the economy to a greater extent. The government is focusing on ease of doing business and the smoother implementation crucial reforms such as the Goods and Services Tax (GST). All these factors could push up the growth rate for Indian companies and the optimism about the corporate earnings may take the markets further to new records.
Earlier last month, Ridham Desai, MD, Morgan Stanley, said in an interview with CNBC-TV18 that he expects NSE’s Nifty index to reach 30,000 points in the next five years, on the back of renewed consumption, greatly improved exports and infrastructure spending by the government. This roughly works out to a CAGR of 25.33% for the Nifty over the next five years. Last week, Yogesh Nagaonkar, Fund Manager, Bonanza PMS, told FE Online that he is bullish on Indian equity markets for near term, pointing out to valuations that are still attractive. “We don’t see any macro concerns,” he said, adding that one should add good quality companies in the portfolio.