BackBulls drive Sensex to record streak
The 30-share index has now risen for 11 days in a row this month, matching the longest winning streak since 7 October 2007 when it rose for an identical number of days.
PremiumMUMBAI : The BSE Sensex is poised to log its longest winning streak as retail investors continue to plough money into the markets. The 30-share index has now risen for 11 days in a row this month, matching the longest winning streak since 7 October 2007 when it rose for an identical number of days. Such long winning streaks have happened only four times: June 1983, October 2003, October 2007 and September this year.
Between 31 August and 15 September, the Sensex rose 4.6% or 3007 points from 64,831.41 to 67,838.63, to hit a record closing high. Stocks that have been the biggest contributors to this rally include Nestle India Ltd (622.35), Maruti Suzuki India Ltd (521), UltraTech Cement Ltd (412.6), Bajaj Finance Ltd (328) and Tata Consultancy Services Ltd (242.8). Unlike the Sensex, the Nifty corrected for a day on 12 September, falling a mere 3 points. It also made a fresh closing high of 20,192.35 on Friday.
The previous occasion when the Sensex gained for 11 straight sessions was between 17 September and 3 October 2007, when it rose from 15,504 to 17,847.
While foreign and domestic institutional investors have pumped in ₹1.54 trillion and ₹1.57 trillion each into the markets so far in FY24, they have booked profits this month. Foreign portfolio investors have net sold shares worth ₹4,768 crore so far this month, according to National Securities Depository Ltd, while domestic institutional investors (DIIs) have net sold ₹6,027 crore this month, Capitaline data shows.
DIIs include insurance companies, pension funds, banks, domestic financial institutions and mutual funds.
Since both DIIs and FPIs have net sold this month, market veterans said direct retail investors and those participating through mutual funds are behind the winning streak on Sensex this month.
“Retail direct and retail investors investing through MFs are the ones behind the 11-day winning streak," said Alok Churiwala, managing director, Churiwala Securities. “While a large part of their monies are moving into small and midcap stocks, some part is moving into index stocks, too, which has helped Sensex and Nifty rise."
Churiwala believes the winning streak will continue and the benchmark indices like Sensex and Nifty would continue to rally through the month-end before a breather sets in.
He cautioned that rising crude oil prices could play spoilsport as it is India’s top import item.
Rising crude raises input costs for companies and squeezes their margins.
Some of the key macro drivers for stock markets are strong GDP growth of 7.2% in FY23 and expectations of approximately 6% growth in FY24, according to an India Strategy Report by Motilal Oswal Financial Services. Moderating inflation (headline CPI inflation at 6.8% in Aug ’23), narrowing CAD (to 0.2% of GDP in 4QFY23), stable exchange rates, global interest rates nearing its peak are aiding the rally.
Moreover, solid growth in corporate earnings and expectations of high-teen earnings CAGR over FY23-25E have kept the sentiment buoyant.
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