Optimism drives markets to new highs
April 01, 2017 19:27
Deepak Korgaonkar & Puneet Wadhwa/ Business Standard report: Several stocks and indices, including the Nifty, and the small-cap and mid-cap index, climbed to record highs in 2016-17 (the financial year ended on Friday), on hopes of a turnaround in the economy and earnings.
The benchmark Nifty on the National Stock Exchange and the Sensex on the BSE rose 19 per cent and 17 per cent, respectively, aided by strong domestic and foreign inflows.
The broader market outpaced the benchmarks. On the BSE, the S&P small-cap index surged 37 per cent and the mid-cap one by 33 per cent. It was the second-best performance for these indices in seven years. In FY15, the small and mid-cap indices had rallied 53 per cent and 50 per cent, respectively, as against a 25 per cent rise the benchmark index. In FY10, both indices had zoomed about 130 per cent, as against a 81 per cent rise in the Sensex.
A strong inflow of over Rs 1 lakh crore collectively by foreign portfolio investors (Rs 55,680 crore) and domestic mutual funds (Rs 51,293 crore) in the year led the rally. During the year, the 50-share Nifty surpassed its previous high, made in March 2015, while the Sensex missed clocking a new high by just one per cent.
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