Business Financials

Nifty climbs Mount 10k, but slips from the peak

Nifty climbs Mount 10k, but slips from the peak

Mumbai: After months of anticipation, the key Indian equity index — NSE Nifty 50 — climbed the 10,000-point-mark for the first time in its almost 22-year history.

However, the index, which was formed in November 1995, was dragged lower from its peak by profit booking and expensive valuations to close on a flat-to-negative note on Tuesday.

Investors were hopeful that the benchmark index will breach the 10,000-mark as expectations of healthy quarterly results and broadly positive global cues had built-up.

It took the index 4.3 months to move from 9,000 points to 10,000 points. The 9,000 level was achieved in March 2017 in a duration of 2.8 years from 7,000 points level.

The Nifty 50 index, which had started with a base value of 1,000 points in November 1995, reached the 2,000-mark in December 2004, taking 9.1 years to double.

The rally has largely been liquidity driven with macro indicators, reforms and stable political atmosphere luring global funds into the index.

According to the NSE, the institutional category has pumped in over Rs 160,000 crore into the domestic markets year-to-date, thanks to expectations of accelerated pace of reforms.

The index breached the 10,000 points level mark during the day’s early trade session at 9.15 a.m. shortly after the pre-open session which lasted for 15 minutes.

The index soon ceded its gains on the back of profit booking and expensive valuations and remained range-bound in the flat-to-positive zone.

“Nifty touched 10,000 in the opening minutes of trade following cues from Asian markets in the pre-opening time,” Deepak Jasani, Head of Retail Research, HDFC Securities, told IANS.

“It soon went into a minor correction as investors who were waiting for this level to be reached to initiate profit taking started to sell and the effect of results and announcements in select companies started to have effect.”

In contrast to its opening rise, the NSE Nifty closed at 9,964.55 points, marginally lower by 1.85 points or 0.02 per cent from its previous close.

The wider Nifty of the National Stock Exchange (NSE) touched a high of 10,011.30 points and a low of 9,949.10 points.

“Market made a historical day by touching 10k supported by better earnings from blue-chip and strong liquidity. However, profit booking emerged at higher levels due to psychological effect,” Vinod Nair, Head of Research, Geojit Financial Services, told IANS.

The Nifty 50 is a diversified 50-stock index accounting for 12 sectors of the economy. These 50 stocks are the largest and most liquid Indian securities.

It is used for a variety of purposes such as benchmarking fund portfolios, index-based derivatives and index funds.

Nifty 50 is owned and managed by India Index Services and Products Ltd. (IISL).

Since inception, Nifty 50 has given annualised returns of 11.2 per cent while having annualised volatility of 24.5 per cent.

The derivatives based on the index are listed on five exchanges globally National Stock Exchange of India (NSE), Singapore Exchange (SGX), Chicago Mercantile Exchange Inc. (CME), Osaka Exchange Inc. (OSE) and Taiwan Futures Exchange (TAIFEX).

IANS