Sensex over 30K; BSE CEO warns against penny stocks

It was the third successive day for gains. While the Sensex has gained 768 points or 2.6 per cent over the last three trading sessions, the Nifty has risen by 232 points or 2.54 per cent in the same period.

Markets witnessed buying in line with global shares, which have been on a high after the first round victory of centrist Emmanuel Macron in French presidential elections. Domestic markets were also upbeat after the impressive show by the ruling BJP in Delhi civic polls on Wednesday. The DIIs invested a net of Rs 1,011 crore on Wednesday even as the FPIs turned net sellers.

Speaking to reporters after celebrating the milestone at the Dalal Street towards the end of the trading, Chauhan said, “As an exchange, we advice investors not to be carried by the 30,000 points euphoria. We would also advice investors not to invest in penny stocks and don’t fall prey to fly-by- night operators.”

Mutual Funds that have been at the centre of this sharp rally of 25 per cent jump in Sensex over the last three years on the back of inflows of over 1.9 lakh crore in their equity schemes, maintained their optimism and advised investors to continue with their investments.
“We continue to remain positive on the market. Further upside will be dependent on earnings season and liquidity flow. We advise Mutual Fund investors to maintain staggered and regular investment approach,” said Harsha Upadhyaya, CIO (Equity), Kotak Mutual Fund.

There are some who, however, raised concern on expensive valuations in the market. “We believe that we are in the midst of a good economic cycle. However, markets have gone up much faster than the change in economic cycle. We believe Price to Earnings for the markets looks expensive but Price to Book Value and market gap to GDP ratio is above average but not significantly higher than average level… We would recommend investors to consult their financial advisors to get their asset allocation mix correct,” said S Naren, ED & CIO, ICICI Prudential AMC.

Overseas, Asian indices ended higher following overnight rally in US stocks on strong earnings announcements and expectations surrounding US President Donald Trump’s ‘tax reforms’.

While Tokyo’s Nikkei ended up 1.1 per cent, Hong Kong’s Hang Seng rose 0.5 per cent.

The Dow Jones Industrial Average was up 45.82 points, or 0.22 per cent, at 21,041.94, the S&P 500 gained 5.75 points, or 0.24 per cent, to 2,394.36 and the Nasdaq Composite had added 9.52 points, or 0.16 per cent, to 6,035.01. European shares were at 20-month highs after a three-day rally sparked by centrist Emmanuel Macron’s win in the first round of French presidential elections.

In India, of the 30-share Sensex pack, ITC emerged as the major gainer with the scrip rising 3.36 per cent.