Equity Funds on a High

The BSE Sensex crossed the 18,000 mark yesterday and since then there's excitement all around. Right from Dalal Street to each household invested in stocks, this milestone and infact every 1k being achieved is an occasion for celebration like Yuvi's six sixes. It took Sensex just 14 trading session to travel from 16k to 18k and the rally has been smooth with very few volatile days. Considering the percentage gains, the BSE Sensex gained 4.5 per cent yesterday. This is far below the highest single day gain of 13.14 per cent on March 24 1992, caused by the Harshad Mehta euphoria.

But now as we move ahead, it would be the percentage gains that matter, as a 1k leap is hardly a change for markets at 18000. The Sensex just needs another 4.05% of gains to touch the 19k mark and who knows the level would have already been breached by the time you would be reading this.

A close look at the mutual fund NAVs reveals that 127 of the 238 equity diversified mutual funds (including open ended, closed ended and ELSS) achieved their all-time high NAVs yesterday. But what about the all time highs of other BSE Sectoral indices? Many indices are still recovering and are away from their all time highs. Far away is the BSE IT index which stands at 4890.18, still 43.2% lower than its all time high of 8613.53 achieved in the year 2000. Other indices like FMCG, Auto and Health Care are still 6-9% away from their all-time highs. Most technology oriented mutual funds like Tata Life Sciences and Tech is still 3.92 per cent lower than its all time high NAV. The other sectoral mutual funds like banking & auto are still lagging behind.

Even now the Sensex is on its way up. With the top 5-6 stocks contributing to the rally of the last 1,000 points there is room for gain for funds even if the market consolidates.

(Source: Value Research)