Bulls continue to gallop despite Evergrande fears and Fed’s taper talks

Mumbai: Indian stocks soared to fresh highs with the Sensex crossing 60,000 for the first time as investors continued to ride the bullish wave, brushing off concerns over the crisis at China's debt-laden Evergrande and the prospect of US monetary policy tightening. With economic and profit growth recovery forecast to be on track, investors, deprived of traditional high-yielding investment options, are betting that the world-beating rally in the country's stocks could last a while though elevated valuations are making a section of the market uneasy.

The Sensex gained 163.11 points or 0.27% to close at 60,048.47 after touching a record of 60,333. The Nifty approached 18,000 but slid back to close at 17,853.20, up 30.25 points or 0.17%. It hit an all-time high of 17,947.65 earlier in the day.

Investor Wealth Rose By 160%

The extended upmove has meant that India's stock benchmarks are among the best performers worldwide since March 23 last year-the start of this bull phase. The Sensex and Nifty have gained over 130% since then.

Investor wealth in domestic listed stocks rose by almost 160% with India's market capitalisation rising to ₹261.14 lakh crore on Friday from ₹100.82 lakh crore in March last year. A clearer picture by the US Federal Reserve this week on tapering of asset purchases has been the latest trigger for risk-on trades. The Sensex and Nifty gained 2% after the American central bank's hawkish remarks.

"Investors are not particularly perturbed by the Fed's hawkish tone because the central bank has only given a timeframe of the withdrawal," said S Naren, CIO, ICICI Prudential Mutual Fund. "The actual tapering is still some time away and the money ($25,000 billion) that has been pumped into the system over a period of time is still there in the system."

The ultra-accommodative monetary policy is helping elevate equity prices by lowering the cost of capital, he said.