The stock markets closed higher on Friday, ending the month and the first half of the year with robust gains. Both the Nifty and Sensex clocked their all-time highs with nearly 1.26% and 1.14% intra-day gain, respectively.
The markets started picking up from the end of March, prompted by steady corporate earnings and rate-hike pause by the Reserve Bank of India. While Sensex has gained 12.50%, Nifty is up 13.24% since March low. The broader market has outperformed the benchmarks with both the BSE Midcap & BSE Smallcap gaining nearly 22%.
The stocks with the highest returns in the Nifty from March lows are Tata Motors (43%), Adani Enterprises (37%), IndusInd Bank (36%), HDFC Life (32.19%) and Divi’s Labs (28%). Around 2,056 stocks (62% of total traded 3,296 firms) gave over 10% return while shares of another 554 companies rose between 1% and 10%.
Data reveal that foreign institutions have invested nearly $13.53 billion in the Indian stock markets between March 24 and June 30. Domestic institutions, too, were net buyers with Rs 8,324-crore investment. Investors wealth soared by Rs 41.85 trillion to Rs 296.48 trillion.
The market capitalisation of Reliance Industries, which holds the highest weight on the Nifty (10.28%), grew nearly Rs 2.35 trillion.
“When there is momentum in the market, it lasts for a while. There’s a decent liquidity from foreign and domestic institutions. Though we may see some correction sooner or later because the markets have moved quite fast from March lows to June highs. But this correction will not be a deep one”, said Ambareesh Baliga, an independent research analyst.
All the BSE sectors indices have given positive returns in the last three months. Realty is up 37%, followed by auto (25%), industrials and consumer discretionary (23% each), capital goods and healthcare (20% each).
The crisis of information technology (IT) does not seem to be over yet. Though the market is at record high, the sector returns remain subdued – it has given 7.50% since March 24.
Though the stock market is performing well, experts caution investors of internal and external factors that can impact its performance. “The market might witness restricted stock- or sector-specific movement once companies start reporting their quarterly results. Also, any geopolitical tension can lead to the disruption in global supply chain and may again flare up prices of metals and oil”, said Sunny Agrawal, head of fundamental retail research, SBI Securities.