As all-time highs go, this was a strange scaling of the summit. Within minutes of the opening bell on Monday the Sensex cruised past the old high it had posted on February 9 but slipped to close well below the mark. At the end of the day, traders would have been left wondering whether the crossover into new highs had indeed paved the way for significant upside in the near term.
These one-day gyrations are very difficult to map, even more difficult to infer from. One safe inference to draw though is that it is increasingly resembling a market of stocks rather than a stock market. This move is very different from the rush to new highs we witnessed at regular intervals back in 2004, through 2005 and into the first half of 2006.
That was a secular momentum dash, as the low-hanging fruit got plucked. The overall market was getting re-rated then. In that phase you could not put a foot wrong. Now, you could be in several sectors and not make any money at all even as the index moves up. While stalwarts like State Bank of India and Reliance Industries have led this index move, around 30 of the Nifty stocks have actually underperformed the index, some by a wide margin. Capital goods and banks have delivered the goods.
Outside the index, the market is very exciting. There too, it is becoming an expert's game. Savvy stock pickers are making a lot of money. In fact, the next one year will be a great test for mutual fund and portfolio managers. As their skills get tested, we will know the men from the boys.
The first phase of this bull run may have been too kind to many a fund manager, hiding their blemishes. Now, the game has changed. Sure, the Sensex may have more upside from here; but it is a whole lot easier to justify 25 per cent higher levels in many stocks than 18,500 for the Sensex or 5,500 for the Nifty.
(The writer is Executive Editor, CNBC-TV 18)