And now 10,000 is reached!!!
NIFTY started at a base value of 1000 way back on 3rd November 1995 has reached a 5 digit figure of 10,000!! It took NIFTY 21 years 8 months and 22 days to scale this peak! What a journey it was!! On a day when we are celebrating the 10,000 let’s look back and see how this milestone was achieved step by step.
1. Journey from 1000 to 2000 (3rd November 1995 to 15th December 2004):
It took 3,330 days for NIFTY to double. The NDA govt did lot of disinvestment and brought in out sourcing but still NIFTY failed to cross 1700 mark. Once Vajpayee lost election in May 2004, NIFTY fell 10% on a single day and the new govt under Manmohan singh continued reforms and took it to the next level. Its BPO and KPO brought by the UPA govt after May 2004 propelled NIFTY. The inflow of dollars with outsourcing companies queuing upto India market the land mark of 2000 getting crossed on 15th December 2004 just before Christmas!!
2. Journey from 2000 to 4000 (15th December 2004 to 4th December 2006):
It took NIFTY just 719 days to double from 2000 to 4000. A slew of reforms undertaken by Govt. took NIFTY in one direction that is Up Up and Up. The journey was unabated. GDP grew at a phenomenal rate of 9.5% in 2005 and 9.3% in 2006. A 9% plus growth triggered huge demand all over growth with IIP averaging 9% in 2005 and 11.5% in 2006. The total number of phones at end of 2005 stood at 12 Crore up from just 2 Crore seen in 2002. Exports grew by 17% in 2005-06 compared to 8% growth in imports. That bridged the trade deficit a lot. For some time during that period we had trade surplus. Rupee was rock solid at 45 per dollar. On back of all this 2000 to 4000 was achieved in under 2 years!
3. Journey from 4000 to 6000 (4th December 2006 to 11th December 2007):
It took just 372 days to add another 2000 points at a rate of 6 points per day compared to 0.15 points seen the journey from 1000 to 2000. This was the last leg of journey that happened at a super high speed. 2007 was the continuation of the previous 2 years with a 9.1% growth in GDP and in the 1st quarter of 2007-08 GDP even crossed 10%. IIP was at a 9.5% which is a record. The dollar value was still under 50 and exports continue to grow. But inflation was also was on the rise and went upto 7% by end of 2007 from 5% seen at the beginning of the year was seen as the first warning signal. Thus India was propelled to 6000 from 2000 in just over 1000 days!!
4. Journey from 6000 to 7000 (11th December 2007 to 13th May 2014):
It took 6 years 5 months and 2 days or 2346 days to just climb 1000 points. This is the slowest movement of NIFTY in terms of percentages. The global meltdown of 2008 and a disastrous UPA II from 2009 to 2014 was responsible for NIFTY to remain stagnant at 6000. The Coal gate scam, 2G scam, the common wealth games scams and Aircel-Maxis scam and many other scams tainted the image of the govt. Its only in February 2014 when Modi and BJP were the favourites to win the elections that NIFTY started moving and just 2 days before the election results 7000 was achieved as a gift for Modi. Markets knew the impending victory for BJP as the day before exit polls predicted a huge win for Modi and BJP and markets crossed 7000 mark!!
5. Journey from 7000 to 8000 (13th May 2014 to 2nd September 2014):
It took 111 days to climb 1000 points at the fastest ever rate of 9.5 points per day. The feel good factor, expectations and the hope was responsible. No economic reasons, its just modi magic and the things he promised were factored in and NIFTY scaled 8000 just before Maharashtra elections in 2014 which BJP was all set to win. It was the acche din that were supposed to come that brought acche din well in advance to the dalal street. Its just under 4 months NIFTY scaled from 7000 to 8000!!
6. Journey from 8000 to 9000 (2nd September 2014 to 3rd March 2015):
It took 182 days or exactly 6 months to scale another 1000 points and reach 9000. Make in India, Start up India, Swachh Bharath and slew of FDI investments that flowed into India in 2014-15 fiscal was responsible for this. GDP was on a path of recovery and from under 5% growth in 2013 GDP grew to 6.5% by 2015 beginning. Inflation halved from 11% in 2013 to 6% by the beginning of 2015. RBI took some good economic decisions under Governor Rajan. There was a feel good factor and a big promise. Plus some solid measures taken on the ground added credibility to the promises made.
7. Journey from 9000 to 10,000 (3rd March 2015 to 25th July 2017):
Slowest movement of market since modi took 854 days for NIFTY to climb the final frontier of 9000 to 10,000. 2015 was a bad year for BJP where it lost a series of elections especially Delhi and Bihar. IIP grew at a sluggish 3.5% irrespective of make in India in 2015 and India growth story was looking shaky. But Modi put every thing back on track with demonitization and the GST passed in early 2017 propelled the economy and brought back the feel good factor. The landslide win in UP in early 2017 restored the credibility and growth is back again. GDP is above 7% and inflation is below 2%. Growth looks imminent and the magic number is achieved on this day of 25th July!!
What is the road ahead?
With 10,000 under its belt NIFTY is on full swing. There is no stopping and NIFTY might hit 10,500 by this Diwali. And by budget of 2018 we might flirt with 11,000. Fundamentals are looking bright and healthy and there are no reasons for worries. The govt is looking stable, reforms will continue. There is a good chance that Govt will get re elected.
So, by budget of 2019 NIFTY might gain another 1000 points and reach 12,000. 1000 points in 1 year is achievable. If that happens then 2019 Feb to June might be a repeat of Feb to June 2014 when in those 5 months NIFTY gained 25%. If we add the same 25% from 12,000 in Feb 2019 then by the time BJP govt is re elected we might see a 14,000 and by the time of 2019 Diwali we might hit 15,000 on NIFTY.
Yes, 15k on NIFTY is possible in next 30 months and you wouldn’t want to miss out on the 50% gain to be achieved in 30 months!!
So, it’s a good time to invest to reap the future profits!
Happy Investing, Stay Invested!