As Nifty Pares Record Highs, When Can Investors Expect Relief Rally? — Nilesh Shah Shares Outlook

As the Nifty strikes a fresh record on Thursday, Nilesh Shah noted that the market expects selling intensity from FPIs to ease, eventually turning them into buyers again.

The benchmark Nifty 50 index hit a fresh record high on Thursday's trading session, finally topping its previous peak set nearly 14 months ago.

The index touched the 26,295.55 mark in trade, surpassing the previous all-time high of 26,277 set in Sept. 2024, after which followed a period of slowdown.

Tariff-related woes, coupled with other geopolitical headwinds and muted corporate growth, had held back the benchmark. But momentum appears to be finally back, supported by optimism in the earnings cycle, domestic consumption push and favourable policy moves, among other things.

According to the Managing Director of Kotak AMC, a good US tariff deal could spark a relief rally, acting as a key trigger for the market to move upward. Shah also pointed out that India's valuation premium over other emerging markets has declined, and that current valuations are trading near historical averages.

He emphasised that India remains a strong domestic growth story, and increasingly, a story of leveraging AI for advantage.

Within the IT sector, he believes certain companies are using AI effectively, especially among mid-cap IT firms, which he feels are on the right path.

Earlier, Ajay Srivastava, the managing director of Dimensions Consulting, summed up market sentiment on the Nifty's fresh record bluntly: "I feel relieved. That's the only word that comes to mind because this has been a very, very bad year for all of us. It's not because India has performed poorly, but because everyone else has performed so well."

Pointing to the rally unfolding despite already-high valuations, Srivastava warned against excess exuberance. "Temper enthusiasm, celebrate today, but this is not a champagne-popping event as one year is a big wait for us," he said.