On the upswing: Equity benchmarks gain for third consecutive month

Rotation out of AI stocks, strong Q2 earnings and FPI buying helped markets hit 14-month highs despite valuation worries

Domestic equity benchmarks gained for the third consecutive month as a rotation out of artificial-intelligence (AI) stocks and growing bets on a global easing cycle have bolstered sentiment. Hopes of a rate cut by the Reserve Bank of India added to the investor cheer.  The benchmarks also hit new highs after 14 months. In November, Sensex rose 2.1 per cent, while the Nifty rose 1.9 per cent. The broader Nifty Midcap 100 rose 2 per cent while the Nifty Small Cap 100 declined 3 per cent. The market capitalisation of BSE-listed firms rose by ₹4 trillion.  Equities have been gaining amidst better than expected September-quarter earnings and renewed hopes of a trade deal with the US. FPIs were net buyers to the tune of ₹4,326 crore, and domestic institutions were net buyers to the tune of ₹72,935 crore.  However, investors booked profits whenever the indices approached new highs, amid concerns about stretched valuations and continued uncertainty over a trade deal. Meanwhile, Sensex and Nifty closed almost unchanged in a highly volatile trade on Friday.