The benchmark Nifty 50 hit the psychological 20,000 mark for the first time on Monday, advancing for the seventh straight day against the backdrop of the G20 summit hosted by India and positive global cues.

The Nifty breached the 20,000 levels in late trade before settling at 19996.4, up 0.9 per cent. Forty-six of its components advanced, with Reliance Industries, HDFC Bank, Axis Bank, ICICI Bank, and Adani Ports & SEZ being the top contributors to the gains. The gauge has surged 3.85 per cent since August 31 and was last seen nearing the 20,000 mark on July 20. The journey from 19,000 to 20,000 took 52 sessions.

The 30-share Sensex rose 0.8 per cent to end the day at 67,127 on Monday.

“The last leg of the rally has been led by the banking stocks. Domestic and foreign money continues to pour in, and it seems like all blue skies with no rain clouds at the moment,” said Andrew Holland, chief executive officer of Avendus Capital Public Markets Alternate Strategies.

Holland, however, believes that the market may be in an overbought zone and a correction could be in the offing, though it is hard to tell at what levels the pullback will be.

Key resistance level

The 20,000 mark was a key resistance level that has now been broken. Nifty made a bull candle on Monday and showed an upside breakout. The index could face resistance at 20,090, with 19,867 as support in the near term, said experts.

“Nifty reaching an all-time high has been driven mainly by local flows in the past few weeks. FPI flow has been relatively subdued, partly due to limited global interest in Asia funds given the weak outlook for China, which has a very high weightage in the region,” said Pratik Gupta, CEO and Co-Head, Kotak Institutional Equities.

Net investments into actively managed equity schemes in India increased more than 2.65 times month-on-month to ₹20,245 crore in August. FPIs pulled out $517 million in September, bringing their year-to-date purchases to $15.9 billion.

“Successful achievements in space and foreign diplomacy have boosted sentiment for Indian stocks. Small- and mid-cap stocks have run up quite sharply, and in some cases unjustifiably so. A review of asset allocation and booking some profits is advised,” said Dhiraj Relli, MD and CEO, HDFC Securities.

Asian stocks traded mixed on Monday, with the Shanghai Composite the biggest gainer after the Nifty. China had its smallest drop in factory prices in five months. The producer price index fell 3 per cent from a year earlier, in line with expectations, after a drop of 4.4 per cent in July. European stocks traded marginally higher.

“My own feeling is that India has come a long way in the last 30 years in its market participation. We have a long way to go. This is a good beginning. There will be ups and downs in the journey going forward, like in the past. India will continue to progress and markets will continue to reflect that progress as seen in Nifty 50 index,” said Ashishkumar Chauhan, MD & CEO, NSE 

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