Lucky 13! Nifty stitches a new record, rallies 13th day — market buoyant, analysts cautious

Booming stock markets led by the Nifty posted a rare record -- rallying for the 13th session in a row – a feat that has never happened since the gauge began trading 28 years ago.

India’s benchmark 50-share Index has gained consistently since August 14th, when it closed at 24,144 points, as surging domestic inflows and a risk-on trade overcame a host of negative issues. During the journey, the Nifty added 1,135 points, or 4.7%, to end at a record high of 25,279 points. On a 3-year basis, the Nifty has compounded at 45 percent, making it the best-performing major index globally.

"Expectations of a rate cut in September by the US Federal Reserve and domestic liquidity are keeping the market buoyant,” Mayuresh Joshi, Director of  Research at William O’ Neal Securities, told BTTV. "Staying with quality and leadership stocks would be the ideal mantra as there is some stalling and froth building up in the market.”

This rally is fuelled by domestic money as retailers, enthused with the robust economic roadmap of the Narendra Modi-led BJP government, shifted a large part of monthly savings into equities. A booming economy, against the backdrop of a troubled world, has made Indian bourses islands of relative safety.

More than 38 billion dollars worth of inflows in domestic equity mutual funds since January have partly stoked this surge in equities.

Additional flows are lapping Dalal Street from Ultra-HNIs, family offices, foreign investors and sovereign funds, all wanting a larger pie of the every increasing action.

Fresh money is flowing into IPOs, block deals, secondary market transactions and acquisitions on Dalal Street. A recent 11-crore rupee IPO from a small & medium enterprise (SME) attracted more than 4,000 crore worth of demand, prompting alarm bells across the market.

Such instances have regulators worried with SEBI, the RBI and today, the NSE chief, repeatedly advising caution –

"Too much of a good thing is bad. SMEs are getting too much funding,” Ashish Chauhan, Managing Director at the National Stock Exchange, told an industry gathering. "This is creating too many apprehensions…. Somewhere there has to be a balance.”

However, for the moment, the party continues on Dalal Street, which is now among the priciest markets globally.