Globally, the Indian equity market has seen a boom. Investor wealth has soared to a record Rs 110.57 lakh crore so far this year, with benchmark indices breaking several records. The market valuation of all companies listed on BSE has also reached an all-time high of Rs.477.93 lakh crore till September.
The Sensex has gained 16.64% so far this year, giving investors substantial returns. On September 27, the Sensex hit an all-time high of 85,978, breaking several records. Strong domestic liquidity fueled the bullish run, according to analysts.
Santosh Meena, head of research at Swastik Investsmart Ltd, said the market was buoyant this year due to strong domestic liquidity, record investment in the mutual fund industry. Equity markets hit record highs despite selling pressure from FIIs, with strong returns to investors. At the beginning of the year, Sensex was at the level of 72,271.94 and now the Sensex is at the level of 84,266. The year 2024 has been statistically excellent for retail investors with strong market performance especially in midcap and smallcap. The midcap has gained 34.32% so far this year, while the small cap index has gained 34.62%.
…Now these four risk factors in the stock market, adopt a cautious tone
- Global Geo-Political Issues: Geo-political issues have been going on for some time now in countries like Iran-Israel. If a situation of war is created, its direct impact will be seen on the equity market.
- Fundo limit increase may reduce volume: Regulator SEBI wants to curb abnormal volatility in the stock market as a result of which the lot size on futures and option trades has been increased to 15 lakh which may result in a decrease in volume.
- High Valuation of Small-Midcap: Most of the small and midcap segment companies as well as public sector undertakings (PSU) stocks are still trading at high valuations. In which there may be a general correction in the near future.
- Weaker-than-expected performance of companies: Corporate companies may have a weaker-than-expected performance in the coming quarters. Reasons like weak manufacturing sector data, rupee depreciation can be influential.
Recent week rally from Fed rate cuts The market has rallied in recent weeks on hopes that the rate cuts by the Fed and the RBI will follow suit. Closed above the .83,000 level of Sept. 17. On September 20, the Sensex touched the historic mark of 84,000 for the first time.
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
