Nifty shines at 25,000: Your big questions, answered

livemint.com:

Mint spoke with experts to address some key questions. The Nifty 50's journey from birth to a behemoth that represents the Indian economy is a story of acceleration. While it took 17 years to gain the first 5,000 points, the index has since transformed from a marathon runner into a sprinter.

It went from 5,000 to 10,000 in nine years, and from 10,000 to 15,000 in just three. The acceleration continued, with the index going from 15,000 to 20,000 in two years. The journey from 20,000 to 25,000 took a mere 10 months.

This rapid progress underscores the robust underlying growth and highlights a significant increase in investor confidence and market momentum. This year, India's indices have been among the top performers globally, and the volatility index has eased in recent months. Over the past six months, among key global indices, India's benchmark Nifty 50 has delivered the second highest return at 14.5%, following Taiwan's Taiex, which achieved a 25.4% return.

What has kept the momentum going during this period is strong flows from domestic institutional investors even when foreign flows have been erratic. However, even foreign flows have now turned positive for two consecutive months after experiencing outflows in April and May. If this exuberance endures, Indian markets could sustain their robust rally.

Thursday's rally above 25,000 points was aided by strong global factors overnight. US Federal Reserve chairperson Jerome Powell offered a strong hint that interest rates were likely to be cut at September’s monetary policy meeting. “This, along with the tech sector rebounding, gave the India market the impetus to finally breach and stay above 25,000," said Andrew Holland, CEO of Avendus Capital Public Markets Alternate