Strong FPI flows and buoyant retail sentiment to keep bulls snorting

A trend reversal may happen if FPI flows turn negative; Nifty will need to fall below Mt 18,000 to go into serious downtrend

Indices across Indian equity markets have edged towards new record highs before undergoing a small correction in the past few sessions. The National Stock Exchange Nifty has gained 20 per cent in the past year; mid-caps (up 33 per cent), small-caps (up 31 per cent), and micro-caps (up 44 per cent) have done better.

Several factors have precipitated this rally.

A pause in interest-rate hikes by the Reserve Bank of India (RBI) has brought relief. There are signs of economic recovery continuing; although profit-after-tax growth rates have mellowed out, revenue growth continues to look strong. Most corporate guidance is optimistic. Inflation has