The stock markets continued to surge on Friday with the Sensex blowing past 60000. It took just eight months for the BSE benchmark to cover the journey from 50000 in January this year to scale the unprecedented 60000 mark for the first time on Friday.

The strong bull rally on Dalal Street has seen the benchmark index rising 10000 points after hitting the 50000 mark in intra-day trade on January 21, 2021.

However, many market experts are now advising caution. Investors should brace for a correction given the expensive valuations, they feel. Though projections vary, the benchmark indices may see a drop of 5-10 per cent, the experts added.

“The absence of a 10 per cent correction in the indices over the last 18 months shows the maturity of the local investors but also throws up the possibility of that happening over the next few weeks or months,’’ said Dhiraj Relli, MD & CEO, HDFC Securities.

Some experts feel retail investors should stay with large caps and avoid taking positions in some of the more riskier mid-cap or small-cap stocks. They add that taking some money off the table and re-entering after a correction may not be a bad idea.

The pandemic in March 2020 saw the benchmark index falling to around 25000. The stocks have been on an upward journey since the unlock process began. The sprint was driven by the easy money policy of global central banks, including the RBI, which ensured that enough liquidity supported stock prices.

Expectations of a turnaround in the economy, higher retail participation and improvement in corporate earnings — though there has been intermittent correction — sustained the rally to 60000.

The incentives and relief packages offered by the Centre to support various sectors, a pickup in vaccination and lower Covid numbers have kept the momentum going in favour of share prices.

“The rally in domestic market is driven by positive global cues, strong inflows by FIIs/DIIs, good corporate earnings, falling Covid-19 cases, upbeat corporate commentaries and low cost of capital,’’ says Motilal Oswal, MD & CEO, Motilal Oswal Financial Services.

So far in 2021, the foreign portfolio investors have funnelled almost Rs 64,655 crore into domestic equities.

On Friday, the 30-share gauge opened at 60158.76 and hit a peak of 60333 after which it settled at a lifetime closing high of 60048.47 — a gain of 161.11 points or 0.27 per cent.

On the NSE, the broader Nifty 50 too came close to the 18000-mark when it touched an intra-day high of 17947.65. It ended at a record finish of 17853.20, a rise of 30.25 points or 0.17 per cent.

“The Sensex reaching 60000 is an indicator of India’s growth potential,” said Ashishkumar Chauhan, MD and CEO, BSE.