SUPER RALLY TAKES BULLS ATOP 50K Fire at Serum yanks Sensex from Mt 50K
Near-100% returns in ten months
As the Indian equity indices logged new highs with the BSE Sensex hitting the 50,000 mark for the first time ever, the road to this landmark has been bumpy at times in the past one year, as it had plunged to around 25,000 points in March 2020.
On March 24, 2020 Sensex touched a decadal low of 25,638.9 points after the announcement of the nationwide lockdown to tackle Covid.
Interestingly, it took the index just 10 months to reach the landmark 50,000 mark. This indicates a nearly 100 per cent return during the 10 month-period.
The markets got a major push after the announcement of the liquidity measures by the government under the 'Atmanirbhar Bharat' package and the steps of the Reserve Bank of India (RBI) including the lowering of rates.
Another major factor pushing the markets higher was the massive inflow of foreign institutional investments (FII) which flocked towards India amid zero or nil interest rates in major economies including the US and European countries.
India received FIIs of around $22.5 billion or Rs 1.7 lakh crore in equities in 2020. Net FII inflow so far this month stands at Rs 20,098.53 crore. The Net inflow of foreign portfolio investment (FPI) so far in the current financial year stood at over Rs 2.38 lakh crore, according to NSDL data.
MUMBAI: Sensex scaled the landmark 50000 points earlier today but failed to hold on to the crucial level as the news of a massive fire at Serum Institute of India's Pune plant prompted investors to take some money off the table and pushed the benchmark indices to close lower.
However, as soon as it became clear that vaccine was not produced in a major way from the affected plant, nervousness among traders reduced and benchmark indices came off its lows, dealers said.
Today, the Nif ty 50 ended at 14590.35, down 0.4%, while the Sensex closed at 49624.76, 0.3% lower. The Sensex scaled 50000-point milestone for the first time as the strength in global markets with a firm risk appetite and a weak US dollar propelled gains. "The liquidity expansion by the central bank and the ample FII driven liquidity, a V-shaped recover y of growth aided by the discover y of vaccine, and most recently the change of guard in the US have been some of the factors propelling markets higher and higher," said Dr. Joseph Thomas, the head of research, Emkay Wealth Management.