InvestorQ : On 07th November the Sensex and Nifty have closed at new highs. Is it the time for fresh buying or to book profits and go out of the market?
manisha Kolvenkar made post

On 07th November the Sensex and Nifty have closed at new highs. Is it the time for fresh buying or to book profits and go out of the market?

Answer
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Mahima Roy answered.
11 months ago


You must remember that this is not the first attempt but the third time that the Nifty and Sensex have crossed above the 12,000 mark and the 40,000 mark respectively. So, there is a lot of strength in the market and that is not the point to exit the market at all. Here are few things for you to remember while taking a decision.

a) Both the Nifty and Sensex have crossed to new highs on the back of high volumes. That is normally a signal of a sustainable rally.

b) Most of the rally has happened in a handful of stocks like TCS, Infosys, ICICI Bank, HDFC Bank, Hindustan Unilever, Reliance Industries, SBI etc. These are the stocks that have rallied and rest of the market has not moved much. In fact, most mid caps and small caps are still way lower over the last one year. So there are large sections of the market that are yet to participate.

c) The corporate tax rate cut is expected to release nearly Rs.145,000 crore into the profits of companies and more than 60% of the Indian companies have shifted to the new formula. That could add to valuations in a big way.

d) FIIs are buying and they are buying aggressively. For example, FIIs pumped in Rs.16,500 crore in October and they have already put in $1 billion in November. FIIs are turning risk-on with the trade deal happening and that is good for Indian markets.

e) Lastly, the Rs.25,000 crore package for real estate could be more valuable that it appears and that would help the realty market in a big way. Additionally, housing is normally a force multiplier for the economy.