Nifty scales 10,000 mark, Sensex touches new high

Continuing with their winning momentum, the equity markets scaled new highs amidst broadbased buying in index heavyweights that helped the 50-share Nifty to close above 10,000 level on Wednesday a day after the index hit this historic milestone in the intra-day trade.

The Nifty gained 56.10 points or 0.56 per cent to end the day at 10,020.65. The 30-share Sensex too rallied to a record high and closed at 32,382.46, gaining 154.19 points or 0.48 per cent.

“The markets are getting into a bubble like situation where the valuations are not able to justify fundamentals. What we are seeing is a liquidity-driven rally. Investors are buying the momentum instead of value. This is why even penny stocks are seeing significant rally along with quality stocks. This is a dangerous situation,” said Ambareesh Baliga, senior research analyst.

As long as the liquidity flow is strong, the markets would be able to sustain their winning momentum. “But as soon as it dries up, the markets are likely to see a steep correction. It is better to stay away instead of making fresh investment at these levels,” he added.

According to the provisional data released by the stock exchanges, domestic institutional investors bought equities worth `676.61 crore while foreign portfolio investors remained net sellers to the tune of `60.60 crore.

“Nifty reaching 10,000 is the culmination of decades of hard work now captured in the front line indices. However, celebrated new highs are also a warning bell for investors. Such euphoria would eventually give rise to anxiety, denial, fear and capitulation and again hope, relief optimism and euphoria will emerge. This cycle goes on and on in a never-ending succession. Ability to go against the crowd makes big money. Investors need to be extra caution during times of euphoria,” said Jimeet Modi, CEO, SAMCO securities.