Confidence in Indian stock market firm, Sensex bull run now eyes 100,000

Business Wednesday 10/April/2024 15:57 PM
Confidence in Indian stock market firm, Sensex bull run now eyes 100,000

New Delhi: India's stock market benchmark, Sensex, which has touched the 75,000 mark this week, has now set its eyes on 100,000 landmark.

According to Santosh Meena, Head of Research at Swastika Investmart Ltd, the Sensex now reaching 100000 seems like a realistic possibility in the near future.

"Currently, India boasts the fastest-growing economy globally, with a promising future fueled by political stability. We appear to be in the midst of a major bull market, which is likely to persist for the next few years," Meena said.

At the same time, Meena advised investors that they should prioritise quality stocks while maintaining a long-term investment approach.

India's stock market has seen constant uptrend since its debut decades back, but the degree of uphill journey under the current government led by Prime Minister Narendra Modi in itself is a different story altogether.

To put it into context, Sensex, the stock market benchmark, was in hundreds back in 1981 and subsequently rose to 4000 by end of the 20th century. Since 2000 and up until mid-2014, when BJP-government under Prime Minister Modi, it was around 25000. And ever since 2014, Sensex has never looked back since then, and now it has passed 75000 mark.

Firm GDP growth forecasts, inflation at manageable levels, political stability at the central government level and signs that the central bank is done tightening its monetary policy have all contributed to painting a bright picture for the Indian economy, and it financial markets.

India's GDP grew at a massive 8.4 per cent during the October-December quarter of the current financial year 2023-24 and the country continued to remain the fastest-growing major economy.

Many global watchdogs have also pegged firm GDP numbers for India.

A growing number of Indians, mostly youth, are reaping dividends from India's growing financial markets, which is also adding to the growth. Also, global investors are also making a beeline to invest in India.

Foreign portfolio investors (FPIs) have become net buyers for the second month in March in Indian stock markets. They had aggressively sold Indian stocks and turned net sellers in the Indian equity market in January 2024.

The latest data from the National Securities Depository Limited (NSDL) showed that the FPIs bought stocks worth Rs 35,098 crore in March. In February, they bought stocks worth Rs 1,539 crore. So far in April, they bought stocks worth Rs 1,590 crore, NSDL data showed.
In most of the years since 2014, foreign portfolio investors have net buyers in India, data showed.

Sunil Shah, a Mumbai-based market analyst, said strong government at the centre and its policies focused on economic growth, coupled with RBI's role, supported the market.

"What we have seen in the last 10 years is that there is huge wealth creation happening by corporate India, their earnings have gone up, their bottomlines have gone up, and that has resulted in Sensex going up," said Shah. "Both RBI and government ensured that this country kept growing."

According to V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, the robustness of the Indian economy, the sustained capital flows into mutual funds and the enthusiasm of domestic investors can support the ongoing rally.

"The hallmark of a bull market is its ability to set new record highs. This has been happening in the mother market US and also in the Indian market. An important feature of the recent rally in India is that it is led by fundamentally strong sectors like capital goods, automobiles, banking and metals," Vijayakumar added.

Ajit Mishra - SVP, Technical Research, Religare Broking Ltd, said Sensex has hit a new milestone of 75,000 in continuation to the prevailing uptrend and is likely to maintain the tone.

"However, mixed global cues and the beginning of the earnings season may result in some volatile swings in between. We suggest participants continue with a "buy on dips" approach, with a focus on sectors/themes that are outperforming in the recent run. Also, one needs to be selective on the broader front and stick with only quality names," Mishra added.