The S&P BSE Sensex has added over 13000 points to take it beyond the 61000-mark ahead of Diwali 2021, and if the momentum continues, experts see this number touching 70,000 towards the end of the year.

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The index has rallied by over 28 percent so far in the year 2021, while the Nifty50 gained more than 31 percent in the same period.

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Rise in inflows from retail investors, pick up in the Indian economy, fall in the COVID-related cases, reform focus from the government, as well as pick up in earnings all lifted the sentiments.

India Inc. is at the cusp of Capex revival and earning momentum should sustain those support valuations, which might look stretch at current levels, but will support the next leg of the rally, suggest experts. 

“In our view, India is at the beginning of Capex revival phase and therefore corporate earnings recovery looks sustainable and premium valuations might sustain,” Binod Modi, Head Strategy at Reliance Securities, said.

“Additionally, the government’s focus to improve credit growth through credit outreach programme and continued traction in PLI schemes augur well for the domestic economy,” he said.

The Indian market has been resilient in the past, amid a surge in domestic flows. A rise in interest rates, as well as energy prices, remains a near-term threat for the Indian markets but liquidity should support any knee-jerk reaction.

It took 20 days for the Sensex to go from 60000 to 61000, and 62 days to go from 55000 to 61000.

Manoj Dalmia, Founder, and Director, Proficient equities Private limited said that earnings, tax collection improving, core segments like the Auto, Banks, Financial sectors driving rally, and opening of the economy and greater retail participation will take the Sensex to new highs.

“We expect the Sensex to reach 67500 in the coming weeks and 70000 by end of the year,” he said.

In term of the Nifty50 levels, experts see the index hitting 20000-21000 mark in the near future as the bull run remain intact.   

"We are in the initial phase of the exuberant bull run, which is well supported by earning improvements, record tax collections, and participation of new investors will surely help the Nifty make new highs in upcoming months,” Sandeep Matta, Founder, TRADEIT Investment Advisor, said.

“There is no sign of topping out yet and markets are in the early stage of equity bull run, which may take the Nifty to 21000 level before witnessing a significant correction,” he said.

Retail investors to lend support

One thing that investors should do is to avoid timing the market. It is futile to wait for the right opportunity. Investors, who waited for the Nifty50 at the beginning of the year, might be still waiting in line because the index rose more than 30 per cent in the same period. 

The road from here might not be smooth but the probability of the markets going higher is much more than it goes down.

Strong flows from retail investors via Systematic Investment Plans (SIPs) which topped Rs 10,000 cr in September is a positive and will help absorb any negative global or domestic cues. It is important for investors to stay invested.

"After March 2021, we are seeing some positive numbers from FII’s in this month at least in the cash market. If you closely observe, FIIs have largely missed the Indian market opportunities since March 2020. Most of the NIFTY rally from 7500 to 18000 is driven by the domestic institutions, HNIs and retail investors," Amit Jain, Chief Strategist - Global Asset Class and co-founder of Ashika Wealth, said.

"FIIs had only participated broadly from a NIFTY range of 11500 to 14500, which shows that now India Markets has enough depth, where it can survive and even grow without FIIs flow as well," he said.

Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.