The headline index, which hit an all-time high of 21,801.45 on Thursday, had rallied 5.5% last November. The previous best monthly gain for the index was in the monsoon of July 2022 when Nifty surprised with an 8.7% rally.
The bluechip rally on Dalal Street has left smallcaps behind as smart money found the valuations of largecaps relatively more attractive.
December month F&O data shows that the rollover for Nifty futures stood at 79.54%, surpassing both the previous month’s figure of 73.06% and the average rollover of the last three months, which was 78.66%.
FII Long-Short ratio increased from 0.56 to 2.28. “Last time, the long-short ratio of FIIs in index futures reached such high levels was in July 2023 when Nifty witnessed a sharp decline the next month (-2.5%),” Emkay noted.
Market-wide rollovers were marginally higher as compared to the previous month and stood at 92.6% Vs 91.5% last expiry.
“2023 has been a great year for our markets – for both the frontline indices and the broader markets. It once again showed the impact of Retail/HNI buying and when the FPIs also turned buyers there was no going back. In 2024, we are beginning on a high base and hence it may be difficult to expect a similar performance by the time 2024 ends,” Dhiraj Relli, MD & CEO at HDFC Securities, said.As against Nifty’s 20% rise in the calendar year 2023, the midcap index is up by almost 45% and the smallcap index is up by 55%. This trend is likely to be reversed in 2024 since the mid and small caps are overvalued and large caps are relatively fairly valued, according to analysts.
“Autos, construction and financials are set to do well in 2024. Autos are in a cyclical rebound, financials are fairly valued even after the recent run-up and the prospects for construction-related segments continue to look good. Capital goods will continue to do well in 2024 too. January is normally a poor month for the market. Q3 results and management commentary will be keenly watched by the market,” said Dr. V K Vijayakumar of Geojit Financial Services.
(Data: Ritesh Presswala)
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