What is happening on Dalal Street after more than three years is again being

RELATED ARTICLES EPFO defers decision on min monthly pension of Rs 1,000 EPFO to decide on min monthly pension of Rs 1k on Friday Market to keep an eye on EU summit, FII flows Day after euphoria, market scared again Dalal Street rejoices, but FIIs not too enthusiastic

described as a “secular bull run”. It took the last 800-point rise in Nifty to get this expression back in use, though the market has been moving up since January 2009.

By Dalal Street’s own definition, a secular bull run is an upward movement of indices without any major southward dip. But given the changes the Indian market has gone through in the past few years, a whole new meaning has been infused in the term “secular bull run”.

Today we are secular not only in terms of direction of the market, but also because of various other facets – the money that’s flowing into the market, the time points at which sharp ups and downs occur, the volume of floating stock controlled more by foreign investors than Indians (excluding Indian promoters), and many more. All factors that make a bull run truly secular.

Money is pouring in from every part of the world. Be it from Japan, West Asia or the US, money is coming from all sorts of funds, foreign mutual funds, pension and hedge funds.

In effect, money is coming in from investors of every religion, colour and creed. Our market gives anyone an opportunity to make money by putting faith in India. At the moment, therefore, nothing could be more secular than the Indian market.

The timing of the strong moves in our indices, which has much to do with what is happening elsewhere in the world, is also a good pointer. One of the main reasons for the large inflows in September was the lack of redemption pressures on global hedge funds. In the US and other developed markets, an investor needs to give a 45-day notice for withdrawing money from hedge funds.

When fund managers in the US and Europe returned to work from their summer break, they found themselves sitting on huge piles of cash as there was no major redemption request. They had to deploy that money somewhere. They looked to India.

It is well known that money goes where growth is, and in the current global context, India is best placed. The result: a surge in liquidity and our market at new peaks.

Equally importantly, the contention that indices generally rise ahead of Diwali and this year was no exception usually stems from sentiment rather than logic.

If we look at the volume charts of the past couple of years, the average volume in India dips when the western market closes for Christmas and picks up when those markets are back at work in the first week of January. The inevitable conclusion: our indices are linked more to Christmas than Diwali.

So, all those disappointed that the market did not scale a new high this Diwali should just wait. We have Eid and Christmas coming up soon. Surely by then Nifty will have formed a new high, once again underscoring the secular nature of Dalal Street.

(Rajiv Nagpal is the director of independent brokerage Elan Equity Services and consulting editor of Financial Chronicle.)