Nifty 50 rockets 5,000 points in a year, ends 9 of last 12 months in the green

In a remarkable display of resilience and strength, Indian benchmark indices reached another record high in today's session, continuing their bullish momentum for the eighth consecutive trading day (excluding a minor 0.14% dip on Friday).

The resurgence in foreign portfolio investor (FPI) inflows, coupled with robust retail participation through mutual funds route and the country's strong economic prospects, has played a pivotal role in driving these record-breaking performances.

Additionally, favourable global factors and high expectations for the upcoming budget have bolstered investor sentiment, prompting increased portfolio investments. Despite high valuations, investors have maintained their buying streak, contributing to the steady upward trend in the Indian equity market, driving it to set new milestones.

Also Read: Long-term investors should stay steady ahead of Budget, says Nishit Master of Axis Securities

The Nifty 50, which represents the country’s top 50 blue-chip companies across various sectors, registered a new record high of 24,236 points in today's session by rallying 0.30%. After concluding June with a stellar rally of 6.56%, the index jumped another 0.45% in just two sessions of July.

Impressively, the stellar rally in June propelled the index to gain 1000 points, moving from 23,000 to 24,000 in just 17 sessions. Following a sharp selloff on June 04, the index quickly rebounded in the following sessions and has maintained a steady upward trend.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, "This one-way move in the market can be attributed to the successful ‘buy on dips’ strategy being followed by domestic investors, both institutional and retail. There is a sustained flow of money into the market through mutual funds, particularly through SIPs. So long as this market construct holds steady, the market will remain resilient."

Also Read: 13 Nifty 500 stocks achieve returns over 100% in H1 2024; Cochin Shipyard leads

After ending CY23 on a strong note, analysts predicted the index would maintain its momentum into 2024, setting target prices between 24,000 and 25,000 by year-end. However, the index surpassed these target levels ahead of schedule, exceeding analysts' expectations.

5000-point rally in 12 months

More notably, the index covered nearly 5,000 points in just 12 months, moving from 19,189 points to the current level of 24,123. During this period, the index posted gains in 9 out of 12 months, with December recording the highest monthly return at 7.94%, followed closely by the gains achieved in June.

During this bull phase, three Nifty 50 stocks—Coal India, Bajaj Auto, and Adani Ports & SEZ—have delivered multibagger returns. Additionally, three other stocks—M&M, NTPC, and Hero MotoCorp—have rallied by over 90%.

Also Read: FPI inflows poised to surge after a modest H1 2024; June sees strong recovery

The robust participation from retail investors has been a key factor behind the unprecedented surge in Indian equities in recent years. It has also prompted many firms to raise funds through the stock market route to capitalise on the growing demand from retail investors.

The participation has not only broadened the investor base but has also provided a strong foundation for the market. Amidst challenges such as high FPI (foreign portfolio investor) outflows, the increasing participation of retail investors acts as a cushion, contributing to market resilience and stability.

Also Read: Nifty 50 soars 7% in June, largest monthly gain since December 2023

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.