Monday has been a historical day at the Indian stock market, with Sensex and Nifty hitting their Highest Levels in their history.
Sensex hit the Psychological 22,000-mark for the first time and moved up for a brief period to touch 22,005.54.
The same happened at the National Stock Exchange index. The 50-share Nifty also saw a lifetime high of 6,548.75 points in its first trading session on Monday.
Stocks of rate sensitive sectors such as capital goods, realty and banking were trading well.
But this High was for a Short Time only.
Later, throughout the day, Sensex and Nifty were trading on narrow ranges. Stocks of metal, IT, healthcare and auto sectors led the fall.
Brokers said apart from the emergence of profit booking by funds and retail investors at record levels, a subdued trend in the other Asian bourses impacted the sentiment here.
"Asian stocks edged lower as weaker-than-estimated Chinese trade and inflation data stoked concerns over the outlook for the world's second-largest economy," said a market analyst.
So what were the reasons?
"This can be described in one sentence - a 100 per cent Narendra Modi rally," said Mehraboon Irani, principal and head of private client group business Nirmal Bang Securities.
Sunil Shah, senior stock analyst at Khambatta Securities, said: "FIIs are putting a lot of money - almost $1 billion in the last trading sessions. Liquidity has driven the market. But they are putting money over the assumption that the BJP's PM candidate Narendra Modi will come to power. His image is investor-friendly. He will give impetus to the economy. As a result, the GDP will grow and so will Corporate earnings."
But the fact remains that fundamentals within the Indian stock market are still what they used to be two months ago - "not very encouraging".
"Valuation-wise, the market is expensive. Except CAD (current account deficit) which has improved, I don't see any much improvement in underlying fundamental as of now," Said Shah.
Even Shah warned investors to think twice before putting money in the market at the present level.
"Till the elections, the tenders market will remain choppy and volatile.
So investors need to be cautious."
However, FIIs, who turned net sellers in the Indian markets earlier this year on concerns of tapering in the US and slowdown in China, are back with a bang.
FIIs have bought index futures worth Rs.3,889 crore ($636.55 million) in March, already heading towards their biggest monthly purchases since October when the total monthly amount reached Rs.4,566 crore.
Read more at
: