BSE equity benchmark Sensex scaled the 38,000 mark for the first time ever in early trade on Thursday. It took just 11 sessions for the index to top the landmark rising from the 37,000 mark hit on July 26.

As many as 21 index stocks have risen in this runup, with ICICI Bank climbing 11 per cent, Axis Bank 10 per cent, Reliance Industries 10 per cent and Tata Steel 8 per cent. On the other hand, Adani Ports, HDFC Bank, HDFC, Maruti Suzuki and Kotak Mahindra Bank have declined between 1 per cent and 7 per cent.

The long-term outlook for Indian equities continues to look bright, says Hemang Jani, Head – Advisory, Sharekhan by BNP Paribas.

“With the government focusing on financial inclusion and raising farm incomes, private banking and consumption sector should be the key gainers. We prefer companies such as HUL from the consumption space and expect an upside of at least 13 per cent. However, crude oil prices and global trade war might have a negative impact in the near term,” he said.

NSEs Nifty50 traded around the 11,500 mark on Thursday, which left its trailing price-to-earnings (P/E) multiples hovering at 28.2, which is the highest in last 18 years.

Nifty traded at this P/E last in February 2000, and then tumbled 50 per cent between February 2000 and September 2001.

Earlier, in January 2008, the index P/E had surged above the 28 mark, after which the 50-pack cracked 44 per cent in next nine months.

“To be honest, all markets are stock specific. Very few markets will move based on the index. Having said that, valuations of some stocks are at crazy new extremes,” said Deepak Shenoy, Founder of Capital Mind.

On August 7, Nifty had the second highest PE level ever since early 2000s, when it was higher than this, Shenoy told ET Now on Wednesday.

“We have got earnings growth as a whole at an abysmal 3-4 per cent for the Nifty pack. You are not seeing earnings recovery as yet. For last three years, it has been suspect,” he pointed out.

Nifty Next50,too, is trading at an all-time high in P/E level.

Second-rung stocks have also performed positively in this period. The BSE Midcap and Smallcap indices have advanced over 3 per cent in last 11 sessions.

Among top performers from this pack, Indosolar, TV Vision, Sri Adhikari Brothers Television and Kwality have surged over 50 per cent since July 26, while Pioneer Distilleries, SpiceJet, Mahindra Lifespace, Bhartiya International and Gammon Infrastructure have plunged between 10 per cent and 25 per cent.

The Smallcap and Midcap indices are still down up to 16 per cent from their respective all-time high levels hit in January this year.

Volatility will continue in the second half of the year due to uncertainty over crude oil, upcoming general elections, rising interest rates globally and trade war woes, says Radhika Gupta, CEO, Edelweiss Asset Management.

She, however, said corporate earnings are improving and it is happening in a broadbased way. Regardless of Nifty and Sensex levels, this years equity growth will be a lot more sustainable. “Ultimately, prices are slaves of earnings,” she told ETMarkets in an interview last week.

Foreign portfolio investors have poured in over Rs 3,500 crore in Indian equities between July 26 and August 8. But domestic institutional investors have offloaded shares worth of Rs 563 crore in this period.

B Gopkumar, Executive Director & CEO , Reliance Securities, said the momentum should shift to midcaps and smallcaps, as a lot of quarterly results are awaited, and they will give insights into current years earnings.

Within the BSE 500 index, 325 companies have announced Q1FY19 numbers so far, with average revenue growth at 17.5 per cent and profit growth at 6.5 per cent on a year-on-year basis.

“We continue to remain positive on the market, expect some consolidation going forward,” Gopkumar said.

Brokerages are bullish on various stocks from across sectors. SBICap Securities is positive on Max Financial Services and M&M with price targets of Rs 640 and Rs 1,050, respectively.

CLSA has raised its price target on Cipla to Rs 760 from Rs 650 earlier. Morgan Stanley has an overweight stance on Cipla with a target price of Rs 716.

Jefferies has a buy rating on M&M and TVS Motor. Goldman Sachs is positive on Britannia and Bank of Baroda.

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