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Thursday’s peak is eleventh in 14 trading sessions for Sensex

Arushi Sen

Mumbai, July 19 With markets reaching record highs everyday, marketmen are advising investors to proceed with caution. The Bombay Stock Exchange benchmark index, Sensex, soared 248.96 points or 1.63 per cent to 15,550.13, its eleventh high in 14 trading sessions.

Money is mostly coming in from Foreign Institutional Investors who have been net buyers to the tune of Rs 652.08 crore today.

For the year, they have been net buyers at Rs 39,499.90 crore, which is more than the total investment of Rs 36,539.70 crore last year. “At this level, mostly institutional investors and FIIs are entering the market. Domestic institutions have been selling,” said Mr Shailendra Jindal, CEO, Mehta Financial Services Ltd.

Domestic Individual Investors were net sellers at Rs 149.01 crore today, according to provisional data available on the NSE.

According to Mr Vijay Kedia, Managing Director, Kedia Securities, “Investors are comfortable at this level, otherwise the market would not have risen this much. In the last two days, world markets have fallen, but even then our market was able to hold its peak. This shows that investors are comfortable in such a fast rising market.”

Even in this long-term bull market, there is a view that the market might react negatively anytime in the short term. “Therefore, investors should not be adventurous at this stage. There has to be cautious buying,” said Mr Kedia.

Even as FIIs and domestic institutions seem to be leading the pack when it comes to investing in this market, retail investors have not shied away. “Retail investors have also jumped in; there is a lot of trading going on. This shows that retail investors have also become active,” said Ms Shahina Mukadam, Head-Research, IDBI Capital Markets Service Ltd.

Going forward, apart from advising caution, marketmen say that one needs to be stock specific while investing. If there’s some negative news, then corrections could be very steep. “One needs to pick and choose stocks carefully and need to focus on valuations. The stock needs to be avoided if valuations are stretched,” said Ms Mukadam.

The markets are expected to continue their bull run for another week at least, before a correction is due. But the perception is that a correction is necessary for the markets to sustain this level.

“In the long term, the markets can only get better, in the short term, it’s very difficult to predict. Even if the market corrects by 10 per cent, it will bring in more investors,” said Mr A. Balasubramanian, Chief Investment Officer, Birla Sun Life AMC Ltd.

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