Another buoyant week and the Nifty Index has touched a new all-time high. Interestingly the trigger for such enthusiasm seems more mood-related than related to actual corporate results. What Corporate India’s big honchos say is immediately loved by the market participants.
Evidence would be the 1-1-1 promise by Mukesh Ambani on hydrogen, which quickly bumped up the price of the stock and many others. Another instance would be a large insurance company acquiring another player in the industry by paying low cash and issuing high-priced equity, which also acted as a catalyst to fuelling such a positive mood.
It is clear, the market mood wants to be held up by favourable news. When the market is in such a mood it is common to witness new highs. The coming weeks will open to us an extremely sentiment-driven market with an overwhelmingly positive mood. Investors need to approach such moods very carefully.
The priority for an investor in such a market is to understand his financial goals, appreciate risk and stay aligned to what is good for him.
