NTPC, Coal India, Cipla, L&T and Tata Steel were top performers, while Britannia, Eicher, HUL, HDFC Bank and Nestle were the key laggards during Nifty’s 19k to 20k journey during Jun’23- Sept’23.

The Nifty-50 has touched the milestone of 20,000 in Sep’23.

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After a volatile and long journey from 18k to 19k, the Nifty-50 added the next 1,000 points (19k to 20k) relatively faster — only 52 trading days (from Jul’23-Sep’23) vs. 425 trading sessions (from Oct’21-Jun’23) during its journey from 18k to 19k, as per a report by Motilal Oswal Financial Services.

“We reckon the upside from here will be a function of stability in global and local macros and continued earnings delivery versus expectations,” the report said.

“Moreover, we note that during the last five General Elections (1999-2019), the Nifty-50 rallied 10-32 per cent six months prior to the announcement of election results. India will be going into General Elections in Mar-May’24.”

Despite the headwinds, the Nifty-50 managed to recover from its Jun’22 and Mar’23 lows to reach 20k, mainly fueled by strong FII/DII inflows of $20.8b/$7.8b between Mar’23 and Sept’23. FII and DII flows stood at $16.5b and $14.2b, respectively, in CY23YTD, the report said.

Though the Nifty-50 is at an all-time high, Mid and Small-caps have outperformed by a big margin. In CY23YTD, the Nifty-50 is up 11 per cent, whereas the Nifty Midcap 100 and the Nifty Smallcap 100 are up 28 per cent and 29 per cent, respectively.

The large caps remained clear outperformers during the Nifty-50’s journey from 18k to 19k. However, the mid and small caps hit new highs when the Nifty-50 moved up from 19k to 20k, the report said.

As the rate-hike cycle seems over and with positive retail sentiment, the mid and small caps remain in favour. This was evident in the recent broad-based market rally, when both mid- and small-cap indices rose 13 per cent and 16 per cent, respectively, outperforming the Nifty-50 by a wide margin of 780bp and 1,150bp, respectively, during Jul’23 to Sep’23 (when Nifty moved from 19k to 20k).