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All-round buying has been seen in today’s trading session in the Indian stock market. After a slow start in the morning, the market gained such momentum that the bears were completely defeated and the bulls took control of Dalal Street. Sensex is trading with a stormy gain of more than 800 points, while Nifty also looks ready to challenge all its previous records. Market experts believe that improvement in global cues and aggressive buying by domestic institutional investors (DIIs) have breathed new life into the market.
IT giants took command of the market
The IT sector has been the biggest contributor behind this bumper growth. IT stocks, which have been under pressure for some time, are witnessing tremendous short covering and new buying from lower levels today. Shares of giants like TCS, Infosys and Wipro have jumped by 3 to 5 percent. Positive signals from the US Federal Reserve about cutting interest rates have boosted the sentiment of IT companies, because a major revenue of these companies comes from the American market.
Record breaking run in midcap and smallcap indices
Today, huge profits are being made not only in big shares, but also in small and medium shares. Nifty Midcap 100 and Smallcap 100 indices have come very close to their new lifetime highs today. There has been a situation of circuit in mid-cap stocks related to the favorite sectors of retail investors like defence, railways and renewable energy. Analysts say that the flow of liquidity in the midcap space has increased rapidly in anticipation of India’s strong economic growth (GDP growth) and better quarterly results of companies.
There was a huge rise in the market due to these 3 reasons
Mainly three big reasons are working behind this stormy rise of the market. First, strong and positive signals are coming from the global market (especially the American markets). Second, the slowing pace of selling by foreign portfolio investors (FPIs) and continued buying by domestic mutual funds. The third and most important reason is the safety of key support levels on the technical charts, which has encouraged traders to aggressively take long positions.
What is the next strategy for investors now?
After this huge surge, the question in the minds of retail investors is whether they should wash their hands in this flowing Ganga? Market experts advise that the long-term trend of the market is very strong, but avoid investing lump sum money by falling prey to any FOMO (fear of missing out). There are still good buying opportunities in IT and select largecap financial stocks in terms of valuations. A strategy of adding midcap stocks with good fundamentals to your portfolio every downturn can yield huge profits in the long run.