NIFTY at 24000. What’s Up

Markets are always tricky and unpredictable. From the perspective that BJP falling short of the majority can be nasty for the markets, to this day. Now BJP is well short of the Majority, but we have the same faces in the governance. A seemingly well-placed govt. which rides firmly on optimism of coalition and a better India.

DII’s (domestic institutional investors) saved the grace during April & May 2024, when FII’s (foreign institutional investors) were net sellers. And then comes June when there was a blip and to surprise all, FII’s have turned Net buyer and so are DII’s as well.

FII’s which were withdrawing from India, couldn’t find a better place and have started investing back, showing confidence in the govt and policy continuity. 

India stands to be the fastest-growing large Economy in the World. It will continue to grow faster than any other large economy in the world, making it one of the most favourable investment destination, for the next few years. 

But yes corrections will be there and it’s healthy for the markets to fall a bit periodically. It helps the market to consolidate, look attractive and gather further steam.

Today, Indian Mutual Funds have a SIP book of over INR 20,000 crore, that is more than USD 2 billion is ready to be pumped into the market every Month, this acts as a huge cushion against any FII outflows which are generally in the range of INR 10,000-40,000 Crore (monthly). So mere FII vagaries can threaten Indian Markets.

Furthermore, we are at the peak of the Interest rate cycle in the US and India as well. A reversal of this (interest rates coming down) is a big thumbs up for businesses. The day the US Fed cuts interest rates, sectors like IT, manufacturing, and others will rally. 

So hold is the new Gold. and don’t forget to have the right Asset Allocation. Gold will continue to shine after a decade of underperformance in USD terms.


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