Rising from its base value of 1,000 in November 1995, the 50-share Nifty of the National Stock Exchange (NSE) breached the 10,000-mark for the first time ever on Tuesday before profit-booking added to the resistance at the record level resulting in the benchmark closing below the psychological mark.
While the index breached the 10,000 mark during intra-day trading on Tuesday, it closed almost flat at 9,964.55. The 30-share Sensex closed at 32,228.77, down 17.60 points. Incidentally, the Nifty took a little over nine years to move from 1,000 in November 1995 to 2,000 in December 2004. But, it took less than five months to move from 9,000 on March 3 to 10,000 on Tuesday.
As per data from the National Securities Depository Ltd, foreign investors have put in nearly ₹56,000 crore in Indian equities in the current calendar year. Market participants though betting big on the long-term India growth story and market outlook have a cautious undertone due to lack of near-term positive triggers and high valuations.
In its latest note, the UBS has said that the “risk-reward fundamentally is clearly unfavourable but we acknowledge that the local retail flow can keep markets elevated despite the absence of a near-term growth recovery.” The global financial major has an end-2017 base case Nifty target of 9,000 with the downside and upside targets at 7,500 and 10,000 respectively.
Similarly, Motilal Oswal, chairman and managing director, Motilal Oswal Financial Services is of the view that strong domestic inflows and overall liquidity are acting as a strong resistance for a market correction.
“We think at this point from a short-term perspective markets appear to be over-heated and trading rich. Correction cannot be ruled out at this juncture. This correction will not be very deep as a huge pool of cash is waiting to be deployed in the markets at lower levels,” said Mr. Oswal.