NIFTY- What’s fueling it’s soar to an all time High!?

Who doesn’t want to go to the Disney Land!? And that too when the Nifty is riding the red-hot Ferrari, cruising at the All Time High of level 13079. But not many days before, one cannot forget the carnage when it dunked the retail investor to 7500 during the month of March. That’s when everyone around panicked and starting pulling liquidity from the market. The month of March 2020 alone saw Foreign Institutional Investors (FII) outflow of around Rs 62,433.51 crore from the market. The fear lessened in the coming months as market picked up after corroborating events such as the ‘September quarter earnings’ results from banks following news regarding the release of the COVID vaccine creating over all positivity. 2020 saw a lot of media news about certain people consuming Narcotics Drugs, whether they did or not NIFTY for sure had been on some substance as it quickly rose to 13000 after a few corrections in the early second half of the year.

Sensex also grabbed a new peak at around 44,499 levels as different Corona virus vaccine trial news began to come in. This also shows how sentiments and emotional aspects about the pandemic drive the market towards a new high. During the lockdown phase, we had seen an upside for the IT stocks when majority of people started to work from home and IT services took a toll. Today, both the midcap and smallcap indices are rallying and majority of stocks have shown significant returns.

 If there can be anything better that could have happened in the market then it is the highest inflow that has come in from the Foreign institutional Investors (FII). This was possible on account of stimulus packages aid worth trillions of dollars by global central banks to rejuvenate economies that have been hit by COVID 19 pandemic. In fact, November 2020 saw the largest ever inflow of worth Rs 51000 crore. These numbers are expected to increase as time proceeds and the world jumps over 2020 adding to stabilize the market and investors’ interest. Decent increase in credit growth like GST collection (year on year) with overall 10% increase in October 2020 from previous year signifies that businesses are coming back on track and helping to stabilize the economic activities. Smoke uncovering from the US Elections and Biden moving into the White House have all collaborated to relieving market aggravated conditions. The Indian markets have been in a substantial upswing since the COVID vaccine British manufacturer Astrazeneca declared that India will be given the priority for the delivery after their claim for success.

The Market is running in its top gear relentlessly. Many experts are of the opinion that the market could witness little correction against this fast drive but again stick to claims of NIFTY hitting 13200 by the end of December 2020. But in the long term, equities are likely to standout in terms of generating appreciable returns. Long Term Investments have always maintained their efficacy and reliability against market’s short term odd movements. With global economies emerging to recover, COVID vaccines are looking to be available at a cost as low as Rs 250/- (US$3.00) (claims Astrazeneca – Serum Institute of India), NIFTY stands a chance to drive forward without major roadblocks. Apart from the phenomenal rally that is seen on both indices and stocks, it is possible that market may see some healthy re-correction during the onset of 2021. India is one the very few countries who has crossed their previous life time highs which gives us a strong indication of good times coming ahead.