Home Bred Kingmakers

The consumption story that has been the key driver for many sectors may now be driving the stock market itself.

- Clifford Alvares

JUDGING THE WAY the stock markets have been swinging ever since the start of 2017, the party seems to have only just begun. The occasional pull-back in stock prices is being increasingly seen as the green light by investors to dive into favoured stocks again. These small corrections are short-lived, and stocks are quickly back to doing what they like to do at present — and that is to go dance up.

The result? The bellwether index crossed a new high in March and, with the Nifty at around 9200, chances are that markets could hit the coveted 10000 gong before 2018. Perhaps, much earlier.

By all accounts, this is a crazy bull market, fuelled by the vast domestic inflows to the market. If the demonetisation has done something right, it seems to have channelled more money in the direction of stocks.

Domestic institutional investors (DIIs) are increasingly pouring money into the stock market. Regular investments in the form of SIP are the new rage. At current value, more than Rs 4,000 crore of hard cash is making its way into the stock market every month through SIPs.

To give a perspective, this used to be the kind of sums foreign institutional investors (FIIs) put in Indian markets a few years ago. In 2008, FIIs sold stocks worth Rs 60 crore-70 crore; now DIIs alone are pouring in sums nearly equal that in a year.

By 2018 or so, the amount of money coming through the SIP route is expected to comfortably rise by 50 per cent. This means a cool Rs 6,000 crore-plus is expected to flow into the markets via SIPs. If this continues, widening whispers in market circles say: Who needs FIIs anymore?