December beats November to give Nifty best returns in 1.5 years
FIIs in the holiday-heavy month, December has turned out to be the best month for Nifty in the last one-and-a-half years with a 7.8% rally.
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,
