Equity markets witness best run in 8 months

Indian markets have witnessed their best run in the past eight months as the benchmark indices made gains for six consecutive days on back of divestment push by the government.

During the week, the equity investors have gained Rs 6.36 lakh crore, as over market capitalisation of the BSE listed firms has Rs 150 trillion for the first time since the Budget 2019 lead to a capital flight from Indian markets. As of Friday's close, the m-cap of the BSE listed firms stood Rs 149.6 lakh crore.

During the rally that started last Friday, the BSE's 30-share benchmark index has surged by 1,417 points (3.7%). On the other hand, the broader benchmark, NSE's 50-share Nifty also surged by 453 point (4.04%).

To give the magnitude of the rally, of the 30 companies listed on the BSE, only one -- Bengaluru-based Infosys -- ended up being a weekly loser in the current week, while all other scrips ended in the green.

The last time markets witnessed such a gaining streak was way back in March, as approval ratings of Prime Minister Narendra Modi -- who was seeking re-election back then -- had shot up.

Analysts say that the surge is on the back of an increase in divestment probabilities by the government -- as foreign investors seem to be returning to Indian capital markets. During the month, foreign investors parked a net of about Rs 4,000 crore in the Indian markets.

"Markets have been soaring high after a few days of correction. Government decision of selling PSU which is leading to the new bull market and positive sentiments for Institutional investors. Also, global cues have been supportive we saw German index scaling new high and most important fin min in sync with the economy," said Rahul Shah, Head, Equity Advisory at Motilal Oswal.

With this, the markets have erased most of the losses made during the July to September period. Despite a couple of trading sessions when the sentiments remained guarded, the average sentiment in the market remained positive with advances to declines ratio at 1.21 -- meaning for every 100 declines, there were 121 advances.

However, experts doubt the sustainability of the current rally. "While there have been sporadic improvements in results, it is impossible to say whether this rally is sustainable in light of the domestic economic situation yet to see greenshoots and the global trade wars / Brexit still to clear some hurdles," said Anubhav Shrivastava, Partner, Infinity Alternatives.