In response to strong signals from the international markets, India’s benchmark indices reached new all-time highs on Thursday ahead of the monthly F&O expiry. For the first time, Nifty50 crossed above 21,700, while Sensex hovered around 72,300. With the exception of media and real estate, most sectors indices showed buying activity.
“It appears that the surge will continue, helped along by the top banks that are observing institutional accumulation. The US dollar index below 101, rapidly falling US bond yields, and strong signals from the home market US portend favourably for the rally’s continuation. It is significant to observe that throughout this rise that has lifted the Sensex above 70,000, premium large caps have assumed the lead. Rising above 15, the VIX volatility index is a strong market indicator.
This should be interpreted by investors as a sign of impending extreme volatility. It’s critical to stay involved during a bull market. But it would be quite dangerous to chase the market at high valuations.