Markets surge over 100% from lows seen in March ’20

Nasrin Sultana and Ashwin Ramarathinam

India’s equities markets have not only recovered but also doubled from March last year when the lockdown imposed to contain the spread of the coronavirus sent markets in a freefall.

With the rally on Monday, benchmark indices BSE Sensex and Nifty have soared more than 100% from the lows hit on 24 March. The BSE mid and small cap indices surged 106% and 125% respectively during

MUMBAI:

the period.

The record market rally swelled investor wealth by ₹101 trillion during the period as they piled on stocks betting on a faster-than-expected recovery in the economy from the widespread turmoil caused by the pandemic.

Markets gained for the sixth consecutive session on Monday, mostly fuelled by optimism following the Union budget. Buying in global peers also supported investor sentiment. Investors worldwide hoped that a $1.9 trillion covid-19 aid package will be passed by US lawmakers as soon as this month in line with the rolling out of coronavirus vaccines.

The Sensex rose 617.14 points or 1.22% to close at 51,348.77 on Monday.

The Nifty gained 191.55 points or 1.28% to end at 15,115.80. Investor wealth increased ₹16.70 trillion in the last six trading sessions.

“Strong global cues supported the domestic rally. The overall market is maintaining its buoyancy with a rally in all sectors, especially auto, IT and metals. Improved domestic outlook is encouraging sustained foreign institutional investor inflows,” said Vinod Nair, head of research, Geojit Financial Services.

“The Indian economy may be on the verge of a multi-year investment cycle similar to the 2003-11 cycle, given positive drivers in two segments of gross fixed capital formation (household, private). There is one big difference between 2003 and 2021 though. The Nifty 50 now trades at 22.7 times one-year forward earnings per share, while it traded at 6-8 times before the start of the 2003-08 bull market, which was led by strong GDP and earnings growth, in turn powered by robust household and private sector investments,” Kotak Institutional Equities said in a note.

THE SENSEX ROSE 617.14 POINTS OR 1.22% TO CLOSE AT 51,348.77 ON MONDAY. THE NIFTY GAINED 191.55 POINTS OR 1.28% TO END AT 15,115.80