Sensex surges 7,700 pts in 7 months to scale 55k peak

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TNN
Mumbai: Nearly seven months after it crossed the 50k milestone, the sensex on Friday crossed the 55k mark for the first time in its history. The rally on Dalal Street this year has been helped by a combination of local and global factors, including a slow but steady vaccination drive, which, although is yet to fully control the pandemic.
During the day, led by two heavyweights — TCS and RIL — the sensex gained nearly 600 points to close at 55,437, while the Nifty crossed the 16,500-level for the first time and closed at 16,529, up 165 points. So far in 2021, the sensex has gained nearly 7,700 points or 16%.
According to market experts, a slew of reasons has been behind this 7,000-plus-point rise in the sensex. The RBI’s accommodative policy stance to support growth, a steady exchange rate helped by judicious central bank intervention, positive foreign fund flows and continuous buying by retail investors through the mutual fund route have helped the gains in stocks from almost all the industries. In addition, a steady flow of IPOs from good companies which brought in positive listing gains for investors, a pan-India vaccination drive with localised lockdowns and strong corporate results as debt burden of most companies fell sharply also helped the rally on Dalal Street, they said.
On Friday, the sensex opened marginally higher and rallied through the session to hit an all-time high at 55,488 points and closed just a tad off that level. Of the 30 sensex constituents, 20 closed with gains with TCS, RIL, HDFC Bank and Infosys together contributing over half of the index’s gain. The day’s rally also lifted investors’ wealth to an all-time high with BSE’s market capitalisation now at Rs 242.5 lakh crore, translating to a little over $3.25 trillion.
According to Joseph Thomas, head of research, Emkay Wealth Management, the rally in frontline indexes and the major sectors continued amid optimism about corporate earnings in the coming months and the continuation of soft-money policy by the central bank. “The current week saw the Nifty and the sensex touching all-time highs, inviting even those on the side-lines to join in. Equity funds saw very good inflows in the last month, both on account of lump sum and SIPs, and the continuation of the same trend may see the markets edging higher. The gains in midcaps and smallcaps was quite negligible, though the sectoral indexes like banking, pharma and tech continued to be buoyant,” Thomas said.
In addition to expectations of a normal monsoon-driven economic revival, strong economic data from the US and the UK in recent weeks have also helped gains in the past few days, Thomas said.