The bulls struck a telling blow on Thursday, forcefully driving home the point that this bull run is not quite hostage to the fortunes of the information technology sector. It may have been the all-important sector once but the market has moved on; new leaders have emerged.
The shift was perhaps best highlighted in the way DLF cruised above Rs 600, notching up a market cap of Rs 1 lakh crore, how GMR soared 14 per cent on traded volumes even higher than the Nifty futures even as Infosys spent a quiet day brooding in a Rs 20 range.
The Sensex, Nifty, mid-cap and small-cap indices are now at all-time highs. The one thing that has been conspicuous by its absence, though, is mass hysteria. At most levels, people have generally been sceptical and cautious. The last time we saw anything remotely resembling mass participation and froth was just before the May 2006 sell-off.
Yet, how long can people stay away from a rising market; they will get drawn in, like moths to a flame. In the last couple of days that process may have begun again. The way stock futures positions have built up in several counters and the manner in which small-caps are beginning to fly tells you that the sceptical crowd is finally throwing in the towel and getting in.
The global punters have been sensing that India could play catch-up with other emerging markets, a fact that explains why they have pumped in nearly $2 billion in the last six sessions, including the ICICI Bank issue. The process of hysteria has begun; it takes a while generally to reach manic proportions.
Unless earnings disappoint in a major way, do not be surprised to see blowout moves in the near future. Where a momentum market makes an intermediate top is impossible to predict, as we have seen over the last four years. It is quite pointless to hold on to a valuation level as a benchmark and miss out on the action.
It is a great trading market with a whole variety of stocks striking bouts of outperformance every day. Just take care not to make the mistakes of May last year. A bit of discipline never hurts anyone.
(The writer is Executive Editor, CNBC-TV 18)