Investors became richer by Rs 2.20 lakh crore in a day. Why Nifty ended at all-time high

Driving the News:Indian stock markets continued their upward trajectory for the fifth consecutive session, pushing the Nifty and Sensex to record highs. The rally was buoyed by robust investor sentiment, with the market capitalisation of BSE-listed companies hitting an unprecedented Rs 3.91 lakh crore.
Why the rise: The BSE Sensex surged 281.52 points (0.39%) to close at 72,708.16, while the NSE Nifty climbed 81.55 points (0.37%) to settle at an all-time high of 22,122.25.
-This upward movement reflects sustained confidence among investors, enriching them by Rs 2.20 lakh crore on Monday alone.
-Foreign institutional investors (FIIs) have been net buyers of Indian equities in 2024, pumping in over ₹ 1.5 lakh crore so far. This is the highest annual inflow since 2012.
-The domestic institutional investors (DIIs), which include mutual funds, insurance companies, and banks, have also been net buyers of Indian equities in 2024, investing over ₹ 1 lakh crore so far. The DIIs have been supported by the strong inflows from the retail investors, who have increased their participation in the stock market through the systematic investment plans (SIPs) and the direct equity platforms. The DIIs have also taken advantage of the market corrections and the valuation gaps to buy quality stocks at attractive prices .
Zoom In: Sectoral performance was mixed, with notable gains in Telecom, Utilities, Consumer Durables, Services, and FMCG sectors. Meanwhile, Metals, Realty, Capital Goods, and IT sectors experienced declines. The broader market outperformed, with the BSE Midcap and SmallCap indices posting gains, indicating a strong preference for a wider range of stocks beyond the large caps.
What They’re Saying: V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the strength of the bull run, despite the high valuation signalled by the Buffet Ratio. “The momentum in the market, driven by strong flows from domestic investors and DIIs, suggests that the rally could continue in the near term,” he said.
Between the Lines: The Indian stock market’s resilience is noteworthy, particularly in the face of mixed signals from global markets and domestic economic indicators. The rally underscores the deep-rooted optimism among investors about India’s economic fundamentals and corporate earnings potential.
What Next: Analysts remain cautiously optimistic, pointing towards a short-term upward trend for the Nifty, potentially reaching 22,500-22,600. The immediate support level is pegged at 22,000. The focus is now on the upcoming federal elections in mid-2024, with expectations that the markets will maintain their momentum, undeterred by global economic uncertainties.
(With inputs from agencies)