NIFTY, SENSEX Record Rally: What Are Biggest Risks

The BSE Sensex has boomed 135 per cent from the lows of 2020 lockdown and has scaled the 60,000 mark. This could be enough for some investors to cash-out by booking profits and tempting for others to jump into the bandwagon.

The near-vertical climb for the last 18-months as pointed out by analysts might end up in a 5-10 per cent correction in the near term. As per experts, previous bull market rallies in India be it in 1992, 1994, 1998-2000, 2003-07 were dented with corrections of 5 per cent, 10 per cent, even 20 per cent.

On the other hand, experts said that any dips will usher-in buying opportunities but these will be pursued with less vigour due to high valuations. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services said that markets are definitely in an expensive zone.

He said that any dip or even a correction of nearly 10 per cent which is quite common in a bull run will re-energise the rally again as it will give further buying opportunities VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said that the area of concern is the rich valuations which are becoming increasingly hard to justify.

Even the NSE Nifty50 which nearly missed touching the 18,000 points-mark on Friday has risen by 138 per cent from the lows of March 24, 2020 to September 24, 2021.

Deepak Jasani, Head of Retail Research at HDFC Securities said that Nifty is now close to 18,000 and once that round number is achieved we could see a broad based correction in the markets.