Nifty at 18,000: Factors and stocks that contributed to this rally, what lies ahead— Experts DECODE

For the first time since April 5, 2022, the broader Nifty50 reclaimed psychological 18,000-level as the domestic equity market continued to trade with strength for the past few sessions. The bullishness in the market was largely driven by infusion of funds by foreign institutional investors (FIIs), who poured in Rs 5,887.21 crore in the Indian equity market this month so far. The trend reversed in August 2022 itself with FIIs investing over Rs 50,000 crore in the Indian equity market. The majority of the chunk of FIIs investment were directed towards bank and financial stocks.  

Speaking on the FIIs trend in the Indian market, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the ongoing market rally is primarily driven by the sudden reversal of FII strategy—from relentless sellers to relentless buyers.  

"Retail investor support and fundamental support to the market from a strong economy are aiding the rally. FII buying is all set to continue since the dollar index has declined to 108, said the expert, adding Bank Nifty is likely to be the first sector to touch new record highs since the segment has strong fundamental support and FIIs have turned big buyers in financials. 

Another major reason behind this rally was the opening of record demat accounts, which surpassed 10-crore in August 2022.  

Sunil Damania, Chief investment Officer MarketsMojo, said the Nifty50 has touched 18000 because the undercurrent in the market is robust.  

"India, for the first time, witnessed 10 crore demat accounts, and we are also seeing how FIIs have come back strongly. Even the volume in the market has improved significantly," said Damania. 

He said India Inc's earnings and their commentary continue to make us believe that India is on a growth path. At the same time, the report from Moody's also suggests that global events will not impact India's growth story, he underlined.  

Nifty at 18,000, but what next?   

MarketsMojo CIO said the market is expected to continue to do well as levers for growth continue.  

"India's PLI scheme, China plus one strategy, India as among the fastest growing economies in the world and inflation continuing to remain soft are all indicators that the market should do well," he said.  

India is in a very sweet spot where growth would be high and inflation low, the expert said .  

"These two combined are rare to find in a volatile world economy. No fund manager can afford to ignore this. Therefore, we believe that 18k is just a number and that Indian indices will continue to rise even further," he added.  

Nifty at 18,000: Top gainers 

Meanwhile, talking about the top contributors of Nifty50, Zee Business research showed Mahindra & Mahindra was the top performer, yielding 56% return during this period. Eicher Motors, ITC, Coal India and Hero MotoCrop were other top gainers during the period. Eicher Motors and ITC clocked 41% and 30% return, while ITC and Coal India gained 24% each during the period under comparison.