Sensex reclaims 50k level on falling cases
MUMBAI: India’s benchmark BSE Sensex rallied on Tuesday to close above the 50,000 mark for the first time in nearly two months as investors cheered prospects of a faster economic recovery from the ravages of Covid-19 amid moderation in daily cases while gains in Asian equities also boosted sentiment.
The Sensex rose for the second straight day to close 612.60 points, or 1.24%, higher at 50,193.33. The Nifty gained 1.24% to 15,108.10.
The Sensex last closed above the 50,000 mark on April 1, while the Nifty closed above the 15,000 mark on 12 March. The two days of gains swelled investor wealth by about ₹5.78 lakh crore.
Shares in other markets in the Asia-pacific region were mostly higher during the day, with Taiwan logging the maximum gains. Taiwan’s Taiex surged 5.16%. In Japan, the Nikkei jumped 2.09%, while markets in Hong Kong and South Korea rose more than 1%.
Though investors are already betting on a quicker pace of economic recovery, with fresh covid cases showing signs of a decline, they remain concerned about the spread of the virus to villages this year, unlike in 2020 when the pandemic was mostly restricted to urban areas.
“Improving trend showing moderation in daily new covid cases and reduction in active cases has boosted sentiments, pushing the market at the higher end of the broad trading range for the past few weeks. The focus is reversing to beneficiaries of withdrawal of restrictions and subsequent revival in the economy,” said Gaurav Dua, senior vice-president and head of capital market strategy at Sharekhan by BNP Paribas.
Dua expects the government to refocus on governance and push through planned growthoriented policies as the easing of pressure on healthcare infrastructure will offer some elbow room.
Data issued by the Union health ministry on Tuesday showed active cases have further reduced to 3.35 million, comprising 13.29% of total infections, while the national recovery rate has improved to 85.6%. However, the death toll climbed to 278,719 with a record 4,329 fresh fatalities while there were a total of 263,000 fresh cases, the lowest in 28 days, PTI reported.
Joseph Thomas, head of research, Emkay Wealth Management, said the decline in the total number of cases to below the 300,000 mark, and the likely enhanced availability of vaccines in the coming weeks, helped shore up investor sentiment to a certain extent.
“The markets may focus on the sustainability of the gains in the fight against the pandemic, and also the numbers around the price level in the light of rising fuel prices, to get more comfort on the growth front,” he said.
Morgan Stanley has forecast the Sensex to touch 55,000 by December, expecting earnings to rise 32% this fiscal, provided new cases are contained. It expects the Sensex to touch 61,000 in a bull-case scenario if covid ebbs completely, recovery in growth is sustained, and global stimulus supports asset prices. However, if the pandemic lingers well into the fiscal second half and growth falters, the Sensex may even sink to 41,000, the brokerage said.