Nifty beats major market indices to become a world-beating index

At least 39 Nifty stocks are trading within the 10 per cent range of their respective 52-week highs, suggesting strong momentum in Nifty constituents.

Nifty has underperformed on the global stage in 2021; however, in one year, by gaining 58.42 per cent, it has become a world-beating index when compared to all the major global indices in the developed world. 

Vietnam's VN 30 is the only index that has gained more than Nifty 50 in the past one year by clocking returns greater than 84 per cent. Nifty 50, however, has underperformed several of its peers in the developed markets with FTSE 100, DAX, CAC 40, IBEX 35, and FTSE MIB & S&P 500 doing better. 

At least 39 Nifty stocks are trading within the 10 per cent range of their respective 52-week highs, suggesting strong momentum in Nifty constituents. IT and Pharma stocks are showing signs of breakout while RIL, an index heavyweight, is showing no signs of tiring on the bourses.

Banking majors have not outperformed and yet, Nifty managed to beat the world indices by a good margin. Going forward, high valuation and low VIX are the two aspects of the markets that are worrying bulls. Markets must pay attention to what US Fed has to say on Wednesday. 

Clearly, due to the stunning run-up of frontline indices, investors are not willing to create fresh positions. Nifty may remain under pressure in the coming weeks.