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Nifty 50 hits record high for 4th straight day, just 41 points away from 21,000


Extending its winning streak for the fourth straight session, the Nifty 50, representing India’s top 50 companies, soared to yet another all-time high in today’s trade, approaching the significant 21,000 mark with a mere 41. 35 points remaining to reach this milestone. The index commenced December on a robust note, buoyed by investor optimism following India’s impressive 7.

6% economic growth in the September quarter, surpassing analyst expectations. This stellar performance reinforces India’s position as the fastest-growing large economy, outpacing China, which reported 4. 9% growth in July–September 2023.

Friday’s rally has also pushed the market capitalization of the NSE-listed companies to cross the $4 trillion mark for the first time. The positive momentum continued into the following two trading sessions, following the ruling party, BJP’s decisive victory in three out of four critical state elections, instilling confidence in political stability for 2024. During Monday and Tuesday’s trade, the Nifty 50 surged by 2.

07% and 0. 81%, and in today’s session, it maintained the momentum, reaching a new peak of 20,958. 65 points, gaining by 0.

50%. : Sensex, In the current month so far, the index has gained 783. 35 points, or 3.

90%. Furthermore, the index has risen by 20. 75% from its 2023 low of 17,359.

Comparing it to the COVID lows of 7,511, the index has delivered a remarkable multi-bagger return of 179%. 2023 has been a remarkable year for the Nifty 50, achieving significant milestones, it surpassed the 19,000 level in June and touched the 20,000 mark in September. Global and domestic markets staged a strong recovery, fueled by investor confidence in the belief that the had concluded its rate-hike cycle.

This resurgence was further supported by robust institutional inflows. Following a consolidation phase in October 2023, the index rebounded in November with a notable 5. 5% month-on-month gain.

This positive momentum was attributed to Foreign Institutional Investors (FII) turning positive after three months, significant retail inflows, and a sharp decline in key commodity prices, including crude oil. Analysts are now advising a shift to large-cap stocks from mid- and small-cap stocks. According to Vinit Bolinjkar, Head of Research, Ventura Securities, the Nifty 50 is valued at a CY24 P/E of 19.

4X. In contrast, the Nifty Midcap and Nifty Small cap are trading at higher valuations of 25. 7X and 20.

1X, representing premiums of 32. 5% and 3. 6%, respectively.

: “The Nifty Midcap trades at a 10-15% premium over the Nifty 50, but the current 32. 5% premium is unusually high. Similarly, the Nifty Small cap usually has lower valuations than the Nifty 50, yet it now exceeds the Nifty 50’s valuation, trading at a 3.

6% premium, which is considered excessively high. ” “We anticipate a correction in both the Nifty Midcap and Nifty Small cap indices. Therefore, we suggest shifting investment focus to large-cap stocks,” said Vinit Bolinjkar.

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From: livemint

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