Nifty emulates Sensex to clock fastest 1,000-point rally

Nifty emulates Sensex to clock fastest 1,000-point rally

Mumbai: National Stock Exchange’s (NSE) benchmark index Nifty has recorded the fastest-ever 1,000-point rally to cross the 5,000 milestone on Thursday, a day after the Bombay Stock Exchange (BSE) Sensex surged past the 17,000 mark.

The 50-share Nifty took 203 trading sessions to scale 1,000 points from 4,000 to 5,000, against 213 days taken by the index to climb from 3,000 to 4,000 points.

The longest 1,000-point rally for the index was when it surpassed the 2,000 mark from 1,000 points, which took more than 10 years from 1994 to 2004. On Thursday, the Nifty opened firm and gained 75.05 points in the first five minutes of trade to touch an intra-day high of 5,015.55 points, supported by heavy buying in Reliance Industries Ltd, Tata Steel, National Aluminium Co. Ltd (Nalco) and Zee Ltd.

Sensex crossed the 17,000 mark on Wednesday, spending six trading sessions to cover 1,000 points from 16,000.

The support for the sustained rally in the last few days was because of aggressive buying by foreign and domestic funds and Nifty’s milestone was because of a firming global markets, market analysts said.

The wide-based NSE benchmark took 52 days to move from 4,500 to 5,000 level. The latest rally started last week after the US Federal Reserve cut key rates by 50 basis points.

On 1 December 2006, Nifty touched an intra-day high of 4,001.30 and on the very next trading session on 4 December, it closed above the 4,000 level at 4,001 points.

The index traded above 4,000 mark for 153 trading sessions, starting from 1 December 2006 till date. On 27 September 2006, the NSE index touched an intra-day high of 3,603.70 and closed at 3,579.30. It has gained 38.03% since then.

Nifty had taken over two years to scale the 1,000 points in the run up to 2,000, recorded on 2 December 2004, and 3000, crossed on 30 January 2006. If Nifty and Sensex had been individual stocks, Nifty would have multiplied investor’s wealth five times in more than 13 years as against more than 15 years on BSE’s barometer.

The Nifty has taken over 13 years and nine months to go from 1,000 point mark on 3 January 1994 to 5,000 milestone achieved on Thursday.

On the other hand, Sensex has taken more than 15 years to expand five times from the 3,500-levels in March 1992 to the current 17,000 mark.

This analysis compares the benchmark indices of the two bourses in terms of a five times growth in the index points.

Taking Nifty and Sensex as individual stock, if an investor had invested 1,000 in Nifty in 1994, it will now be 5,000. In comparison, for investing in Sensex, the investor would have to begin in 1992 to get five times of the amount today.

However, Sensex’s growth has been phenomenal in terms of the milestones achieved as it grew from 1,000 in July 1990 to 17,000 in September 2007. The index on Wednesday crossed the 17,000-point mark, taking its fastest 1,000-point stride in six trading sessions on sustained foreign institutional investment (FII) inflows and fund buying. Analysts said markets would consolidate after reaching the new highs and caution investors.

“Market corrections are healthy in the sense that it cleanses the froth in the system," Enam Securities Pvt. Ltd economist Sachchidanand Shukla said.