Ali Hasan
The stock market is clearly on a roll and this resulted in Sensex crossing 50,000 points for the very 1st time in the history of BSE. It touched an all time high valuation of 50,184.01 but it was unable to hold the valuation for too long and ended the day trade at 49,624.76.
Even though it was unable to hold the 50,000 mark, it’s still pretty impressive if you consider that India hasn’t fully recovered from the aftermath of covid-19 pandemic.
This gain in Sensex could be due to many factors such as:-
- Joe Biden becoming the 46th president of USA. He might prove quite promising for India as he relaxed the visa restrictions as soon as he became the president. Kamala Harris, the vice president might also be fruitful for India as she is of Indian origin and this could work in favour of India.
- The news of Reliance Industries getting SEBI’s approval of their ₹ 24,713 crores deal to buy Future Group’s retail assets might have further added fuel to fire. But, this will be a major blow to Amazon’s efforts to block the agreement.
- Another reason could be the launching of different IPOs in the market such as – Nazara, IRFC and Indigo Paints.
More reasons could be, better-than anticipated corporate earnings, hopes of bold economic reforms in the upcoming budget and sustained buying by foreign institutional investors is keeping the investors’ sentiment bullish on equity markets.
Sensex is quite Bullish
Buying was visible across sectors as all sector gauges, barring the index of metal stocks, were trading higher led by the Nifty Auto index’s 1% gain. Nifty Bank, IT, Media, Pharma and Private Bank indices also rose over 0.5%. Mid and small cap shares were in-line with their larger peers as Nifty Midcap 100 and Nifty Smallcap 100 indices rose 0.7%.
On the flip side, Adani Ports, TCS, HDFC, Tata Steel, GAIL India, JSW Steel, Bharat Petroleum and HDFC Bank were among the notable losers. The overall market breadth was positive as 1,484 shares were advancing while 614 were declining on the BSE.
Positive global cues and expectations of healthy quarterly results along with that of a supportive Union Budget FY22 powered the ascent of Sensex. The gains of last the 5,000 points in Sensex has come in just 32 trading sessions.
“Expectations of turnaround in the economy post Covid vaccinations and continued FPI inflows have led to this kind of gains for Indian markets in a globally low interest scenario,” said Deepak Jasani, Head of Retail Research at HDFC Securities.
According to Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services: “Sensex touched the historical levels of 50,000 today for the first time ever. Indian markets have been witnessing strong momentum over the past few months on the hopes of a faster economic recovery after the pandemic lockdown. Also positive global cues, sustained FII inflows and strong corporate earnings kept the sentiments high.”
Foreign portfolio investors have net bought Indian stocks worth $18 billion since November as they chased returns amid surging negative yielding debt and optimism for global recovery in the backdrop of Covid-19 vaccine rollout. Nilesh Shah, managing director of Kotak Mahindra Asset Management Company, earlier today said that he expects foreign investors to remain net buyers.
“Many Asian countries have effectively contained the virus – and are further ahead in the economic restart. We see the region’s tech orientation allowing it to benefit from structural growth trends,” said asset manager Blackrock in a recent note.
Besides, Likhita Chepa, Senior Research Analyst at CapitalVia Global Research said: “Since the March’2021 lows of Covid-19, there has been a one-way rally and the markets have grown almost 100% from the March lows. Important events to watch out for are the earning announcements for Q3 and then the general budget from which the expectation is huge. So far, the results have been very good and in-line with the street expectations because of which, we have seen rally in IT and now we are seeing the same in banking as well.”
“On-time execution of vaccination programme and the expectations of reaching a conclusion on farmer’s protest are some of the reasons for which market is in a cheerful mode.”
This is good news for the investors as just a few weeks ago, Nifty 50 crossed 14,000 points but you need to be aware as this could also be a Bubble and a huge market correction could wipe out millions or billions of investors wealth in a snap of your finger. Do your own research before investing.
