As Sensex nears 60,000, here’s a warning from past bull markets

“All the previous bull markets in India – 1992-92, 1994, 1998-2000, 2003-07 – had major corrections of 5%, 10%, even 20%. But not as of now. But this will change and the market Will correct, probably soon, as valuations are difficult to justify,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

“This brutal bull market continues to haunt both bears and bulls. Stock markets are all about volatility. But this bull market has been almost one-sided for almost 18 months. More importantly, it is almost a global one. Events in which China, Hong Kong and some other countries are exceptions. Ignoring the Fed’s easing signals, the mother market US is leading from the front.

“The amateur money from retail investors is now being dominated by the smart money of institutional investors. This may change when FIIs turn into major sellers. We no longer know when and what might trigger this. Some money off the table Taking this might not be a bad idea even while riding the bull,” he said.

On Wednesday, the Federal Reserve kept interest rates unchanged but indicated it is on track to start rolling back asset purchases this year. However, in some comfort for investors, the US central bank left the door open to providing stimulus to the economy when it needed it.

After touching a new high of 59,957.25 during the day, the 30-share Sensex ended 958 higher at an all-time high of 59,885.36. Similarly, the broader NSE Nifty rose 1.57% to its new closing peak of 17,822.95. It touched an intra-day record of 17,843.90.

Global markets also rose. Concerns about a potential spillover into the broader financial system from the Evergrande crisis caused volatility in equity markets in recent weeks.

Santosh Meena, Head of Research, Swastika Investmart said: “Our market is in a roaring bull market and is outperforming global peers, where the market corrected marginally as a buying opportunity. The recent correction was inspired by China’s Evergrande issue and the matter seems to be easing for some time so we are seeing a short-covering rally around the world. The outcome of the Fed meeting is not favorable for the equity markets as the Fed has mentioned a time frame for bond tapering, but since global markets had already recovered before this meeting, we are seeing a short-covering rally because The market prefers clarity over uncertainty. “

Besides, “Indian market has its positive factors like unlocking, strong growth in real estate sector, good monsoon, positive growth in government policy and investor confidence. The pace of growth in the real estate sector is boosting sentiment as it is A ripple effect on many areas,” he said. Nifty Realty Index rose 9% today.

Mr Meena however takes precautions. “It will be important to watch the behavior of global markets from here and if they remain calm then our market can continue to outperform where 18000 and 6000 are psychological barriers for Nifty and Sensex respectively, however if global markets fall once again If so, we can expect profit booking in our market also.”

Devang Mehta, Head Equity Advisory, Centrum Broking said liquidity remains extremely strong, which is supporting the Indian markets.

“Today’s rally was symbolic of the strong sentiment prevailing locally on the back of a reduction in Covid cases and strong vaccination numbers. With the recovery in economic activity and optimism around the capex cycle revival, the earnings trajectory for India Inc. will naturally pick up. Big boost. Most of the companies that are market leaders in their respective domains have seen improvement in operational efficiencies and productivity as well as being able to reduce debt with major gains in market share. Liquidity remains extremely strong, Be it foreign portfolio investors, local mutual funds, insurance companies, family offices, HNIs or even retail investors.”