Nifty Aims Mount 10k; Just A Mere 2% Shy Of Five-Figure Mark
If the sharp buying in Nifty stocks is any indication, the Nifty, despite all the technical glitches, is slowly heading towards the five-figure mark. An increase of a mere 200 points will take the Nifty soaring past the 10,000 mark.
Ever since it was launched back in 1996, the Nifty 50 has increased 10 times in just 21 years. The index was launched back in 1996 with a base value of 1000 points. At close to the 10,000 mark now, the CAGR works out 11.6 per cent. This excludes all the dividends paid out over the years, which in fact, would take the total return to shade higher levels.
Ever since the start of this year, the Nifty has returned a whopping 23.5 per cent, and is still going strong. Barring just a few sectors like pharma, which has not earned much and a lackluster tech sector, all the constituents of the Nifty are firing on all cylinders.
Despite the fact that there were some hiccups along the way such as demonetisation, the Nifty has returned a solid 29 per cent return in the past three years.
Lately, the some frontline stocks like Reliance Industries and ITC have received some well-deserved attention from investors. Reliance Industries has delivered a 37 per cent return YTD. Ditto for ITC, which has since soared nearly 33 per cent.
It’s no surprise that the Indian stock markets have been on a roll since the last year. The fund flows into equity have been very strong, and is likely to continue as investors across the country are evincing interest in the stock markets. No surprise then, gold and real estate are losing their charm in investors’ portfolios.
It seems like the Indian investors are now beginning to understand the power of equity - and rightly so. And lately, with the interest rates heading lower, the yields on fixed income securities has dwindled. As a result, senior citizens are not able to get the desired returns from their fixed deposits and other fixed income securities.
This is expected to further drive investors to the stock market. As of now, over Rs 6000 crore is entering the equity markets via the SIP route. And going forward, experts reckon that in another two years, nearly Rs 10,000 crore of money would flow into the markets through SIPs.
A key to remember is that for future growth, the stock markets requires two things: earnings and a steady flow of money into equities. The latter is now on steroids. Sooner or later, earnings growth will catch up in the markets. Analysts expect earnings growth to clock nearly 20 per cent in FY20.
Experts also point out that this year, the Nifty will soon make a new base – that of 10,000 points. Stay invested.
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