Stock Futures – Stock markets on longest winning streak since 2010

India’s stock markets are on a hot run not seen in nearly a decade. The first trading session of 2021 saw the Sensex close with gains for the ninth straight week, a feat it had last achieved in April 2010. The Nifty, which had slipped to 7,500 levels in March 2020, closed at a record 14,018 on the first day of the New Year.

The Sensex, which had declined to around 25,000 in March, closed at 47,868 today. The near-doubling has happened in just nine months. This follows a rally in global stocks, fuelled by unprecedented liquidity infusion by the US Fed and other central banks around the world.

The promise of a pick-up in the economy — December GST collections hit a record high — is also feeding the Sensex and Nifty rally. According to market analysts, all eyes will now be on the Union Budget, on February 1. The government’s road-map for achieving its current and next fiscal year targets will form its backbone, they say.

However, there has been uncertainty over the divestment programme as the Centre is yet to announce the names of the final bidders for BPCL, in which it is selling its 51 per cent stake.

Broader markets

“In the short run, it is unlikely that the Nifty or Sensex will see any major fall like we saw in February and March,” said Nitin Shahi, Director, Findoc Financial Services Group. “The momentum has built up. Investors should look at wider stock markets, too, outside of Nifty and Sensex. After a roaring rally in the two indices, money will also move into a lot of mid-size companies that have potential. This has been the trend post major rallies for two decades now.”

Deepak Jasani, Head, Retail Research, HDFC Securities, said: “The uptrend in the market is maturing after the Nifty ended higher for the ninth consecutive week; however, there are no signs of immediate reversal. The advance-decline ratio is sharply in the positive, suggesting higher interest in broader markets.”

In just two months — November and December — foreign institutional investors pumped in more than $15 billion (₹1.13-lakh-crore) into India’s markets to purchase stocks in the cash segment, data show. As on date, open positions of over ₹18,000 crore are outstanding in the Nifty futures and positions of more than ₹4,800 crore are outstanding in the Bank Nifty futures. The two indices are the largest traded futures contracts in India. Open positions worth more than ₹1-lakh crore are outstanding in the stock futures segment.

On Friday, none of the other markets in Asia or Europe traded.