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Sensex At Record Highs, Will The Momentum Continue Next Week?
Markets hit a new record high this week, with the Sensex ending at a new lifetime high of 52,641.53 points. It was a record closing, record intra-day high and record market capitalization for BSE listed companies.
Interesting statistics of the Sensex in 2021
| Date | Type of record |
| Jan 21 | Sensex crosses 50,000 points. |
| Feb 3 | Closes above 50,000 points for first time. |
| Feb 8 | Ends above 51,000 points. |
| May 24 | Market capitalisation of all BSE-listed companies touches $3 trillion. |
| June 11 | Sensex hits record high of 52,641.53 points. |
| June 11 | Sensex closes at record peak of 52,474.76 points. |
| June 11 | BSE listed companies market cap touches 2,31,11,214.71 crore |
Will the Sensex continue to rise?
It is likely that we will see the markets further gain momentum. There were hopes that global markets would see some reaction, after US consumer Inflation data came in at 5%. Ironically, bond yields in the US dropped to a 3-month low and stocks rallied. This should never happen logically.
With bond yields low, Foreign Portfolio investors would continue to pump money into global equities, including India. We expect Indian stocks to continue to rally on account of the enormous liquidity.
Even domestic mutual funds continue to see huge inflows into their funds, leading to further liquidity. In fact, for the month of May domestic mutual funds saw a net inflow in excess of Rs 10,000 crores.
It's unlikely that fundamentals would come to the fore anytime soon. Liquidity would drive markets and it would not be surprised if the markets continue to rally from here.
"The further direction of the domestic markets would depend on the monsoon, opening up of the economy in a phased manner and the pace of vaccination going forward. As states ease restrictions gradually in Jun'21, we expect the demand environment to get better which can have a positive impact on the markets. Technically too, Nifty remain in a positive set up and can see a move towards highs of 16000 zones. Also with many states starting to ease restrictions gradually, we expect the demand environment to improve and the unlock trade to play out well in Jun'21," Says Siddhartha Khemka of Motilal Oswal.
The markets seem to have now factored in the gradual openings and the forward price to earnings multiples continue to be high for Nifty companies. Investors are advised to stay away from investing lumpsums in the market. Staggered investment and that too at lower levels would now be advisable.
Many analysts are informing their clients to at least partially book profits and move a little money to debt to protect capital.
