From scaling Mount 50,000 in January this year to breaching the 56,000-mark for the first time on Wednesday, equity benchmark Sensex is “consistently surprising even the incorrigible optimists”, analysts said.
The remarkable rally comes in the wake of equities going into a tailspin in March 2020, with the 30-share BSE index plunging a massive 8,828.8 points or 23 per cent during that month as concerns over the pandemic’s impact on the economy jolted investor sentiment.
“The market has been consistently surprising even the incorrigible optimists by setting new records. The Sensex has scaled the 56,000 mark.
“However, the journey of the market has been volatile with sharp ups and downs unnerving the short-term investors and traders. The future would be no different,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The present bull run, primarily driven by the new retail investors, is in an overbought, richly valued zone, Vijayakumar added.
The BSE benchmark touched the momentous 50,000-mark in intra-day trade on January 21, 2021. On February 3, it closed above 50,000 for the first time.
The index crossed the 51,000-mark in intra-day trade on February 5 and then on February 8, it ended above 51,000-level. It crossed 52,000 on February 15.
It touched 53,000 in intra-day trade on June 22. On July 7, it closed above the 53,000-mark. On August 4, the BSE benchmark went past 54,000. Then on August 13, it rallied above 55,000.
The BSE Sensex scaled the 56,000-level for the first time on Wednesday in intra-day trade and reached its all-time high of 56,118.57.
Following the optimistic sentiment, the market capitalisation of BSE-listed companies also reached its all-time high of Rs 2,42,08,041.64 crore.
“Sensex is continuing its northward journey with new highs every day supported by inflows in large-cap stocks, especially IT names. August month is all about large-caps after 3 months of underperformance,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Analysts added that gradual pickup in economic activities after states started unlocking and ramp-up of vaccination drive have also lifted market sentiments.
The Sensex, the country’s first equity index, was launched in 1986. On July 25, 1990, it had closed above 1,000 points. In another milestone, the benchmark closed above 10,000 on February 7, 2006.
The benchmark has gained 7,878.16 points or 16.49 per cent so far this year.
In 2020, the index made monthly gains in seven, while closing with losses in five.
The Sensex had gained 15.7 per cent in 2020 after facing a roller coaster ride during the pandemic-hit year.