Sensex scales 50K mark for first time
„ It has taken 30 years for index to go from 1K to 50K
Mumbai: The BSE Sensex scaled the 50,000 mark for the first time on Thursday on growth optimism and global cues, but succumbed to profit-booking in fag-end trade to finish in the red. Weighed by selling in banking, finance and IT counters, the BSE index ended 167.36 points lower at 49,624.76.
The Sensex breached the 50000 barrier for the first time ever in early morning trade and made a new all time high of 50,184 on positive global cues.
However, due to profit taking in the last hour of trading, the benchmark index fell sharply from the historic highs and closed at 49624, down by 167 points or 0.34 per cent.
The broader Nifty-50 Index also made a new alltime high of 14753 but closed lower at 14590.35, down by 54.35 points.
Provisional data showed profit taking by the domestic institutions of Rs 1,039.48 crore while the foreign portfolio investors were net buyers by Rs 1,614.66 crore.
The market’s rally has been driven by ample liquidity, as foreign portfolio investors have pumped the highest ever money into Indian market of Rs 2,41,021 crore so far in this financial year, far more than the previous high of Rs 1,40,033 crore in 2012-13. This month, too, they have bought equities worth over Rs 22,730 crore.
From 1990 when the index crossed the 1000mark the first time ever, it took 30 years for the Sensex to reach 50000, analysts said.
Apart from the sharp rebound from the Covid-19 inflicted dislocation of economic activity, liquidity and low interest rate have been major drivers of the current bull market rally, analysts said.
"The combination of strong capital inflows, low interest rates and leaner balance sheet of Indian corporates along with government measures for growth is expected to lift the economic growth ahead. The same is likely to resonate in capital markets, thereby keeping the markets buoyant in the long term," said Vijay Chandok-MD & CEO, ICICI
Securities.
Nilesh Shah, group president & MD, Kotak Mahindra Asset Management Company, said, "The Sensex touching 50000 in 2021 is like Indian cricket team winning test series in Australia against all odds of Covid-19. While economic data is about the past which is improving month-on-month, the Sensex is reflecting the positivity about the future."
"As the sensex crosses the 50K, the valuations do look stretched. The valuations are a function of earnings and earnings not coming through remains the key risk at the current juncture. The continuous up-move not backed by fundamentals may make the rally fragile, going ahead," said Joseph Thomas, head of researchEmkay Wealth Management.