Indian Equities Hit Record High on Strong Domestic Fundamentals

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The Indian stock markets continued their winning streak on September 11, with the benchmark Nifty closing at a record high of 19,996.30. The Sensex rose 528.17 points or 0.79% to 67,127.08, while the Nifty gained 176.30 points or 0.89% to 19,996.30.

The market was buoyed by strong domestic fundamentals, including robust economic growth and positive corporate earnings. The Indian economy grew at a robust 8.7% in the first quarter of the current financial year, beating expectations. This was the fastest pace of growth in 17 quarters. The growth was driven by a strong rebound in manufacturing and services sectors.

Corporate earnings have also been strong so far in the current financial year. The BSE Sensex Corporate Profitability Index, which measures the profitability of the 30 companies listed on the BSE Sensex, has risen by 20% year-on-year.

In addition, foreign investors have been net buyers of Indian equities in recent weeks. They have bought a net of $2.3 billion worth of Indian equities in the month of September so far.

Technical analysts said that the Nifty is now in an overbought position and could see some consolidation in the near term. However, they expect the market to continue to trend higher in the long term.

The outlook for September 12 is positive, with the Nifty likely to test the 20,100-20,200 resistance zone. However, investors should remain cautious in the midcap and smallcap space, as these sectors are already trading at elevated valuations.

Here are some additional factors that could influence the market in the near term:

  • The outcome of the upcoming monetary policy meeting of the Reserve Bank of India (RBI).
  • The release of key economic data, such as the IIP and CPI inflation numbers.
  • Global cues, such as the performance of the US markets and the direction of crude oil prices.

Investors should focus on quality stocks with good fundamentals and avoid chasing high-flying stocks. They should also maintain a balanced portfolio and rebalance it periodically to reduce risk.


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