Markets ready for samvat 2070: Sensex hits new closing high

3:30 pm Indian equity markets ended flat after hitting a record high as blue chips, especially banks, rallied on the back of strong foreign flows.

The Nifty closed above 6300 for the first time since November 2010 while Sensex marked a new all-time closing high but ended short of its intra-day high of21293.88 hit earlier today.

While NSE Nifty ended at6307, up 0.13 percent ( 5 points away from all-time high), Sensex ended 0.07 percent at 21178.

Most analysts have attributed the current rally to just liquidity as FIIs have pumped in nearly $3.5 billion into Indian stocks ever since the US Fed Reserve delayed tapering of its monetary stimulus at a meeting on 18 September.

“I am not too pleased with the way fundamentals are shaping up. This new high is driven by only a handful of stocks which are hopelessly expensive despite fundamentals,” Phani Sekhar, a fund manager of portfolio management services at Angel Broking told Reuters.

“The liquidity rush is making people accumulate stocks. If fundamentals don’t improve or liquidity tapers, then this rally won’t have many legs.

Despite the record high, the Sensex remains Asia’s fourth-worst performer this year in dollar terms among the exchanges tracked by Thomson Reuters, with a fall of 2.6 percent.The returns have been hurt by a weak rupee, which hit a record low of 68.85 in late August, that had sparked concerns about a currency crisis in the country.

Sensex has touched an all time high, but one is not sure if this would result in participation from retail investors, who have sitting on sidelines for quite sometime now, said Raamdeo Agarwal, Joint MD, Motilal Oswal Financial Services, in an interview with CNBC-TV18.

The sense that prevails among retail investors is to book out of the market at 6,200, he added.

“One is still not getting the faith that good companies have been rewarded, corporate performance is better in this quarter, economy after three-four years is turning around and so let’s start looking at some stocks; gold is flat, real estate is flat, fixed income is dicey so let’s start looking at 5-10-15 percent allocation to the equities. No, that’s not the kind of sense. However, still the sense is that at 6,200 let us get out,” he told CNBC-TV18.

” It’s not euphoric that’s for sure, I think it’s like uncorking Champagne but finding it flat. Dalal Street normally is known for binges of euphoria but euphoria is not a sentiment because retail participation has been noticeably absent in this market. It has almost been five-six years in the making, three years since we tested the levels and withdrew back and now we are back to that level. I think it’s slightly unexpected but bull markets climb a wall of worry and the market is looking ahead to an election cycle and to the coming of new administration perhaps and that’s the reason why it’s powering up at this point of time," said Ramesh Damani in an interview with CNBC-TV18.

What record high? Sensex is still Asia’s fourth-worst performer

12:27 pm Markets are scaling record highs on the back of foreign inflows but Sensex still remains Asia’s fourth-worst performer this year in dollar terms among the exchanges tracked by Thomson Reuters, with a 2.5% fall.

“I am not too pleased with the way fundamentals are shaping up. This new high is driven by only a handful of stocks which are hopelessly expensive despite fundamentals,” said analyst Phani Sekhar at Angel Broking.

Even Rakesh Jhunjhunwala said it doesn’t feel like an all-time high for the market.

I think the real new high will be when (Nifty) goes to 6700," he told CNBC-TV18 in an interview.

Sensex high unsustainable, rally driven only by defensive stocks

11:33 amPrabhat Awasthi, MD and head of equity research at Nomura, in an interview with _CNBC-TV18 s_aid the current rally is unsustainable, because it has been largely driven by defensive shares which have now become expensive and offer limited upside from these levels.

““For a fresh rally to start and sustain you need domestic cyclicals to catch up, things like banks, capital goods etc. A sustainable rally would mean that growth needs to essentially start heading back up which is definitely not something that I would call for structurally at this point of time,” Awasthi said.

To read more on why the Sensex is hitting record highs despite economic gloom, click here .

Rajesh Jhunjhunwala says Sensex will hit real highs only when retail investors start participating

11:00 AM India’s ace investor Rakesh Jhunjhunwala also noted that retail participation is very low in the market and the Sensex will hit real new highs only when this participation rises**.**

He also said the market is expecting a Modi-led BJP government at the centre by next year.

He further explained that pharma and IT sectors, which are driving the current rally, have nothing to do with the Indian economy but they have benefited from the rupee depreciation.

10:29 am It seems liquidity has triumphed fundamentals.

The play now is on liquidity, and market will get pushed towards newer and newer highs,” said KR Bharat of Advent Advisors in an interview to CNBC-TV18 recently.

“The higher it goes the more dramatic is the correction that I see happening in Q1 of the new calendar year,” said Bharat who cautions macro-economic fundamentals-local and global-are yet to improve.

Bulls are seeking comfort in past trends which suggest there could be money to be made in the short term, despite the gloom in the economy.

Moreover, there are very few participants left domestically.

A few days before the market closed at a all time high, Business Standard reported that nearly 500 brokers were closing shop.

Also only 2 percent of the BSE 500 stocks are trading near their 52-week highs.

Sensex hitting record high is like drinking flat champagne

10: oo am Foreign investors bought Indian shares worth Rs 1,875 crore on Thursday, their biggest single-day purchase since May 21, remaining net buyers for a 20th consecutive session, bringing their total buying to nearly Rs 18,192 crore ($2.96 billion) during that period.

FIIs bought Rs 15,706 crore worth of Indian shares in October, to mark their second consecutive monthly buying, helping the country’s benchmark index to make a record closing high on Thursday.

The BSE index also gained 9.2 per cent in October, its biggest monthly gain since January 2012 on strong foreign inflows as a delay in the US Federal Reserve’s tapering of monetary stimulus led to a surge of money in risk assets. ( Reuters)

9:34 am Here’s a list of the best and worst Sensex performers since 2008:

According to CNBC-TV18 data, best performers include Sun Pharma, up 456 percent, TCS ( 315 percent) Hero Moto ( 200 percent), ITC ( 187 percent), HUL ( 160 percent)

Worst performers include Bhel ( down 72 percent ), Tata Steel ( down 65 percent) Reliance Industries ( down 42 percent ), Bharti Airtel ( down 27 percent), L&T ( down 34 percent), SBI ( down 27 percent).

“Investors had put most of their eggs in a few baskets, which can’t continue to deliver quarter after quarter. Unless other heavyweights such as Reliance Industries, Tata Steel, L&T, BHEL and State Bank of India start contributing, the earnings funnel will keep getting narrower - increasing the downside risk for investors with each high,” Dhananjay Sinha, co-head institutional equity at Emkay Global Financial Services was quoted as saying by Business Standard .

Market expert Udayan Mukherjee advised investors to enjoy the current party but cautioned that there will be twists and turns on the global front.

Foreign investors bought shares worth Rs 1875 crore on Thursday, their biggest single-day purchase since May 21, remaining net buyers for a 20th consecutive session, bringing their total buying to nearly Rs 18192 crore during that period.

**9:20 am 1 November:**Happy Diwali says the market as Sensex hits all-time high after five years and ten months

Foreign funds pushed up the Sensex to all-time high as they continued buying pharmaceutical, information technology and auto sector stocks. A reasonably good earning season and the abundant global liquidity are the reason for the new highs for the Indian shares.

BSE Sensex has marked all-time high of 21,230.67 on strong foreign inflows,beating January 2008 record of 21,206.

At 9:20 am, the Sensex was up39 points at 21204, while Nifty was up 8 points at 6306.

Sensex gainers include Tata Motors and Sesa Sterlite.BSE auto and realty indexes started the day with gains but the FMCG index was in red

Pharma, IT and auto have been the best performers while banking, oil and gas and metals have been the worst since January 2008.

The Sensex has gained over 9.3 percent in 2013 but investors are still not celebrating.

CNBC-TV18 reported that 50 percent of Sensex companies are trading withing 10 percent of their 52 weeks high.

Experts are not very upbeat about the markets touching an all-time high given the narrowness on the performing stocks and valuations.

“The market is not euphoric because retail participation has been noticeably absent in the market. It’s like opening a champagne but finding it flat,” said BSE member Ramesh Damani.

“We are in a dichotomous situation where the good stocks, which everyone wants to focus on, are expensive and the relatively fundamentally unattractive stocks are cheap”, says BNP Paribas Securities’ Manishi Raychaudhuri.

Sanjay Dutt of Quantum Securities also sees nothing significant on the realistic valuations. “The rise has been extremely narrow and even in terms of market participation, it is not there whatsoever”, he tells CNBC-TV18.

Unexciting rally pushes Sensex to new closing high of 21141

3:30 PM Indian markets continued their rally today fueled by foreign inflows with the Sensex once again ending at an all-time closing high and the Nifty closing at a three-year high.

While the BSE Sensex ended 107 points higher or 0.51 percent up at21141, NSE Nifty closed up 076 percent at 6300.

10: 09 am The Sensex is now just 65 points away from its intra-day life high of21,206.77, while the Nifty is just 13 points away from its all-time closing high.

For Nifty, all-time intraday high is 6,357; recorded on January 11, 2008.

The market today recorded the highest ever turnover at Rs 5.33 lakh crore.

However , today’s rally was unexciting due to lack of participation from retail investors. Hence there is nothing to be exuberent about because even though markets are at all-time highs, investorportfolios are not.

“The polarization of the market where Sensex has reached all time closing high level is courtesy few stocks and few sectors in technology, pharmaceuticals and fast moving consumer goods (FMCG) - rest of the market is at a fairly low level of valuation,” said Nilesh Shah of Axis Direct.

As R. Venkataraman Managing Director, India Infoline Group, says “The truth is that there are few stocks that foreigners like and those stocks happen to be performing really well keeping the indices high. The rest of the market is languishing and nobody cares. Category A where the FII holding is high and continues to remain high and is liked by the foreigners and category B which is not so much liked by the foreign investors. Taking the same base of 2008, if you plot it, then the foreign index is at 41,000 whereas the domestic index is still at 16,000-17,000. In other words, after 5 years we are still below the previous peak. This indicates to a large extent how FIIs are driving the Indian market”.

FIIs have poured in more than Rs 12,100 crore ($1.97 billion) in Indian equities since the beginning of this month.

As Firstpost said earlier , the present rally, if we may call it one, is not broadbased. The local and global concerns continue.

Countdown begins, Sensex just 30 points away from life high

3:00 pmThe countdown has begun with Nifty touching 6300 for the first time since November 2010 and the Sensex trading at a five year high.

The BSE Sensex is just 30 points away from its all time intra-day high.

The life high for BSE Sensex is 21,206.77, hit on Jan 10, 2008.

While the BSE Sensex is currently at21190.24, Nifty is at 6307.

The Nifty is currently trading at a three year high andaccording to market expert Sudarshan Sukhani, Nifty is set for a breakout, so one should buy the Nifty on any sharp dip or correction.

In an interview to_CNBC-TV18_, he said the market is now poised for making lifetime new high, so one avoid being on the short side and build long positions.

In fact the markets today recorded their highest ever turnover at Rs 5 lakh crore.

Pharma, IT, auto have been the best performing indices since January 2008. However, the current rally has been led by banking stocks.

According to Viktor Shvets, Head-Asian Strategy, Macquarie Securities it is impossible for Federal Reserve to do any tapering for a long time be it in December, March or even June.

Federal Reserve may not buy treasuries but they will have to do something else because the liquidity just cannot leave market, he said in an interview with CNBC-TV18.

“The moment Fed says they are going to withdraw, we will see correction. As the correction comes-in, Fed will be back with liquidity in one form or another,” said Shvets.

12:00 pm Indian markets are pretty much flat in morning trade ahead of the expiry of October derivative contracts at the end of the session today but experts expect the markets to cross all-time highs very soon.

While the BSE Sensex was up 2o points at 21054, Nifty was up 4 points at 6255.

Indian equities have gained around 13 percent since the US Federal Reserve’s decision to delay tapering its $85-billion-a-month asset-purchase programme in late August, driven by robust inflows from foreign investors.

However, of there is another wave of outflows from emerging markets triggered by Fed tapering, India is bound to see significant outflows next by the second quarter of 2014.

Sensex ‘fireworks’ a non-event for retail investors

9:45 am As expected, Indian equity markets opened flat this morningahead of October future’s and options expiry.

Sensex started the day with losses of around 30 points, 18 components are in red. While BSE Sensex openeddown 38 points at 20998, Nifty was down 11 points at 6241. The Indian rupee also opened weaker at 61.41 against the US dollar.

Globally, the USFed has not made any major changes to its stimulus program.Sothe quantitative easing will continue for a couple of months at least.The American economy is not in good shape as yet, the Fed seems to be suggesting. Meanwhile, the RBI governor has said India is in a better position to face US tapering as and when it occurs.

Adrian Mowat, Chief EM & Asian Equity Strategist, JPMorgan, expects the US Fed to begin tapering its stimulus plan only by the second quarter of next year.

He is also bullish on India and prefers Indian equities over China. " Global investors park money in India despite the government not because of the government. Investors would invest regardless of who wins polls as global factors are more important that politics, said Mowat in an interview with CNBC-TV18.

According to JP Morgan’s investment allocation, India has replaced Russia as highest net overweight while MSCI India has outperformed emerging markets by eight percent over the last one month.

However, even though Indian equity markets are scaling record highs, retail participation is at a decade low.

According to Nilesh Shah of Axis Direct the market is not exuberant despite making record highs because retail investors are not making money.

He believes this is just a liquidity-driven rally fueled by foreign flows but the current valuations are not justifiable due to weak fundamentals and macros.

As R. Venkataraman Managing Director, India Infoline Group points out in his latest blog, the market is suffering from bipolar disorder .

“If you look adjust the index for the top 15 stocks with highest FII holding, the Sensex would be above the 40,000 levels. If you adjust with the top 15 least FII holding in the Sensex, the index is below 17,000. For a retail investor looking at the Small caps, an adjusted Sensex based on the BSE Small cap index would show the Sensex below the 10,000 level.”

Clearly, brokers and retail investors are unhappy but the Sensex continues to hit record highs due to foreign buying.

“The truth is that there are few stocks that foreigners like and those stocks happen to be performing really well keeping the indices high. The rest of the market is languishing and nobody cares. Category A where the FII holding is high and continues to remain high and is liked by the foreigners and category B which is not so much liked by the foreign investors. Taking the same base of 2008, if you plot it, then the foreign index is at 41,000 whereas the domestic index is still at 16,000-17,000. In other words, after 5 years we are still below the previous peak. This indicates to a large extent how FIIs are driving the Indian market”, adds Venkataraman. ( Read the full blog here )

Retail investors mere spectators, don’t expect fireworks from Sensex today

8:45 amThis current market rally is being largely fuelled by Fed’s quantitative easing program and analysts expect liquidity to find its way into emerging markets at least till CY13 end.

“The outlook is a flat start. A good amount of rollover has already happened and things could get choppy towards the close as F&O expiry sets in. The Sensex scaled to a new closing high and the Nifty appears to be celebrating a bit above 6,200 levels. The highs have come without any fireworks really and most investors, especially at the retail level are left as mere spectators. Indices may get uncomfortable at these levels and it would be too risky to expect a catch up rally in the mid-cap and small-cap stocks anytime soon,” said IIFL in a note.

So even if equity markets may be at record highs, retail participation is at a 10-year low.

Asian markets are trading lower after the US Federal Reserve’s latest policy outlook was deemed less dovish than some had wagered on, lifting both bond yields and the dollar.US stocks also fell with the S&P 500 snapping a four-day rally. The Dow Jones fell 0.39% while Standard & Poor’s 500 Index shed half a percent.

The BSE Sensex ended at record high level of 21,034; suggesting possibility of further upside that could possibility take Nifty to all time high as well.

It’s America not RBI: Why the Sensex has seen record gains

The BSE benchmark Sensex surged nearly 105 points on Wednesday to close at all-time high of 21,033.97 on heavy foreign fund inflows in bluechips, amid speculation that the US Fed would maintain its monetary stimulus when they conclude a meeting today.

Continuing gains after Tuesday’s 359-point rally following the RBI policy, the Sensex shot up by 104.96 points, or 0.50 per cent to 21,033.97 – eclipsing its previous record close of 21,004.96 on 5 November, 2010.The 30-share bluechip index’s intra-day high of 21,206.77 was hit on 10 January, 2008.

“Continued buying from FIIs and greater risk appetite of investors at higher levels is leading to this rally,” said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.

Here is why Sensex made history:

The credit for Wednesday’s record closing goes to the US. It is purely a liquidity driven rally since foreign fundsfunds have continued to buy domestic stocks for 19 straight sessions .

Foreign institutional Investors (FIIs) have pumped in nearly $2.39 billion (Rs 14,678 crore) in the Indian equity market since September, highest in past five months, according to Sebi’s data.

The subsequent delay in the US Federal Reserve’s tapering of its monetary stimulus and signs that show the economy may have bottomed, have sparked a revival in Indian markets.

“May was the month in which tapering fears first surfaced and swept the rupee along. We feel that the Fed may not taper at all till February. That means liquidity will continue to flow, charming our markets,” Jyotheesh Kumar, executive vice-president of HDFC Securities, was quoted as saying by Reuters.

As Firstpost said earlier , “equities could well be ignoring the RBI and focusing on the US Federal Reserve (Fed) postponing the tapering of its $85 billion a month asset purchase programme. Equities are either ignoring growth and inflation risks or are factoring in something that the bond market is not, given that the Sensex and Nifty are close to record highs.

Moreover, data from the US clearly shows that it is not out of the woods yet.Consumer confidence plunged in October, thanks to the government shutdown and discouraging data on jobs,factory output and home sales in September.

Bad data from the US means the government is not in a position to roll back its stimulus just yet.

So clearly, Indian markets arebetting that easy global liquidity will cushion equities against a steep decline.

“Now, we are expecting tapering no earlier than March when Chairwoman Janet Yellen takes the helm of the Fed. We should expect fairly benign liquidity scenario midterm, punctuated by spikes of volatility as the market contemplates the notion of rate normalization,” said Masha Gordon of PIMCO in an interview to CNBC-TV18.

On the domestic front, a good monsoon, better-than-expected quarterly earnings and the RBI’s move to ease liquidity steps has also lifted sentiment.

Deutsche Bank has raised its December 2013 target for the BSE Sensex to a record high at 22,000 points from 21,000, saying investor pessimism earlier this year was receding amid positive developments such as a good monsoon.

Among other positive factors, Deutsche mentioned a bottoming out in the economy, the likely withdrawal of liquidity tightening measures by India’s central bank, a synchronized global growth recovery and a Federal Reserve that has delayed tapering of its monetary stimulus.

With inputs from Reuters