The gain-to-loss ratio for Sensex stock has been higher than 1 since April, meaning more stocks are up than down. The rate was 1.13 in June so far and stood at 1.1 and 1.4 for the previous two months.
Indian stocks started the month with a bang and Sensex hit new highs last week. So the bulls have solved their own problems on D Street? Maybe. Amid swings, an index of 30 blue chip stocks rose to a record 63,000 in November but struggled to maintain momentum due to weak global indexes. Domestic stocks rebounded in June but gave up profits due to profit taking. The recent rally has added 8.13 trillion yen in assets to the investor group this month so far and enriched them by 10 trillion yen since the start of the year.
The market expansion is another testament to this bullish phase. The gain-to-loss ratio for Sensex stock has been higher than 1 since April, meaning more stocks are up than down. The rate was 1.13 in June so far and stood at 1.1 and 1.4 for the previous two months.
The strong gains are also visible in the significant number of stocks that are trading near their 52-week high – 53.4% of BSE 500 shares are trading within 10% of their all-time high. a year while 12% of stocks hit a 52-week High on June 21.
“Markets not only in India but around the world are hitting lifetime highs indicating the start of a long-term bull run. There are a number of factors driving this recovery and capital outflows from the markets. Foreign portfolio investors (REITs) are among them. Umesh Kumar Mehta, chief investment officer at SAMCO Mutual Fund, said there is another important factor supporting the market, which is positive investor sentiment.
Market experts are feeling the upside even amid the macroeconomic headwinds and the seemingly lingering global turmoil. The most recent rally was fueled significantly by shares of Adani Group, which surged, accounting for 84% of market capitalization gains in 2022. But despite Adani’s stock, it has been steadily declining since the crash. in Hindenburg, but the stock is still up 4.1 percent year-on-year. -date compared to a 3.5% gain in 2022. “More than just fundamentals, the rally seems like a re-evaluating game of valuations,” he said. Deepak Jasani, head of retail research at HDFC Securities, said the earnings resilience of companies around the world during difficult times and signs from central banks that they are Closer to peak interest rates have helped boost indexes and stock prices in recent months.
After a strong retreat from India last year, REITs have returned to the Indian market with a net investment of $7.28 billion in 2023 to date. Capital flows into other comparable markets such as South Korea and Brazil also remained steady with $8.86 billion and $1.14 billion in net investment as of June 21. REITs will remain net buyers unless Central banks continue to tighten policy rates further.
While market sentiment has improved globally, India’s year-to-date returns still lag behind their global counterparts. America’s Nasdaq was up 29% and Germany’s DAX was up 13%, compared with 3.5% in India. “Indian indices perform very well in 2021 and 2022, so there is a broader basis for growth in 2023. Tech-heavy indexes like Nasdaq and Kospi [of South Korea] perform well. in 2023 thanks to companies with successful products and platforms in it,” he said.
Still, valuations remain high, with 71% of stocks in the BSE 500 trading at well above their five-year average. This may not be a cause for concern, experts say, as India’s indices have traditionally traded at a premium and are expensive relative to other emerging markets. Meanwhile, the market could see corrections as El Nino fears heighten inflation concerns, but fundamentals remain strong.