After weeks of swinging, benchmark index Sensex hit its all-time high of 63,588.31 in intra-day deals on Wednesday, June 21, 2023. Meanwhile, Nifty is now less than half a percent away from its new peak. Along with the Sensex, broader indices Nifty Midcap, and Nifty Smallcap also touched their respective new highs in trade today.
After a rough start to the year, Indian markets recovered gracefully since April, giving positive returns in 3 straight months including June so far.
The recent rally in the Indian markets comes on the back of a pause in rate hikes, moderating inflation, improving macro situation, and decent March quarter earnings. However, experts believe that the continuation of rate hikes globally or the return of higher inflation could disrupt the ongoing rally.
Sensex has gained 1.4 percent in June till date, extending gains from a 2.5 percent rise in May and a 3.6 percent jump in April. The index was completely flat in March. However, it fell 1 percent and 2.1 percent, respectively, in Feb and Jan 2023.
Overall in 2023, the index has advanced 4.5 percent and rallied 23 percent in the last 1 year.
Now that the Sensex has hit its record high, let's see what experts expect next:
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services
Sensex rallying to an all-time high is in tune with the global rally in stock markets. Most markets are at 52-week highs. Last year, global markets had corrected discounting a US recession early this year and its impact on global growth and corporate earnings. But this didn’t happen and markets are compensating for this overreaction of last year. In India, a sustained rally beyond the record highs is difficult since valuations are rich. A further rally, beyond a point, will not have fundamental support.
Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS
Sensex touched the all-time high mark, and Nifty 50 is a few points away from the all-time high level. The Indian market 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 vs other EM countries, strong earnings outlook, robust demand across the sector, the banking sector in better shape, and private capex cycle expectations.
The Indian economy stands at a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy. 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. Our base case Dec’23 Nifty target is at 20,200 by valuing it at 20x on Dec’24 earnings.
Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities
The BSE Sensex crossed the previous all-time high of 63,583 which was hit in December last year. The pace of the rally has slowed down over the last few weeks however the underlying momentum is still strong. We believe that traders can lighten up their long-leveraged positions and book some profits in the immediate term. But medium to long-term investors must continue to hold on to their positions and use dips to buy more.
The pause in interest rates from both the US Fed and RBI is a major sign of relief for corporates who were paying interest costs through their nose. Private and government capex is also at an all-time high which should boost infrastructure spending. This will have a ripple effect and fuel growth.
We are just months away from the Indian and US elections. We believe the positive momentum should continue as governments generally tend to do everything in their control to keep the market participants happy in order to be re-elected to power.
S Ranganathan, Head of Research at LKP Securities
Benchmark Indices touched new highs today on the back of a sustained increase in capital expenditure by the GOI coupled with rising manufacturing PMI. Despite the increase in interest rates we are witnessing rising credit demand and India Inc today can boast of much better balance sheets than ever before. The return of FIIs to our markets since April has boosted sentiment even as domestic investors continue to repose confidence in Indian equities.
Arvinder Singh Nanda, Senior Vice President, Master Capital Services
This 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 short-lived usually.
Santosh Meena, Head of Research, Swastika Investmart
Sensex surged to a new high, breaking a six-month wait for investors. While the headline indices Nifty and Sensex are displaying gradual upward movement, the true growth potential lies within the broader market. This broader market outperformance is expected to persist as we approach the peak interest rate scenarios. Although some profit-booking is anticipated around the 64,000 level, any temporary decline presents an excellent buying opportunity. The immediate demand zone is projected to be within the range of 61,700–62,400.
