The benchmark BSE Sensex surpassed the 61,000 mark for the first time on October 14, taking 14 sessions to add more than 1,000 points from 60,000 on September 24.
The key stock index took two months to reach this level from 55,000 on August 13, and it has more than doubled since the March 2020 low.
Since the start of the current financial year, the Sensex has gained 24 percent and investor wealth has surged by Rs 68 lakh crore. The BSE’s market capitalisation jumped to Rs 272 lakh crore on October 14 from Rs 204 lakh crore on March 31.
On the National Stock Exchange, the Nifty 50 crossed 18,300 on October 14, rising 25 percent from 14,700 on March 31.
The stock market has crossed new milestones in every quarter since November last year. That’s when the Nifty 50 surpassed the previous record of 12,430 in January 2020 before retreating in February and March.
The new record was set in November 2020, with the re-opening of the economy as the first wave of the pandemic abated, spurring hopes of improved growth and corporate earnings. Since then, the bulls have largely been in control of Dalal Street.
Experts are of the view that the stock market’s gains will be sustained in the coming quarters and the benchmark index as well as the broader markets and sectoral indices will scale new highs.
“Markets will continue their upward journey. They may keep on reacting to situations now and then, however, the long-term trajectory is always positive. Corrections are a part of every bull run and they are usually short lived,” said Raghvendra Nath, MD of Ladderup Wealth Management.
He said all factors in the economy are conducive for accelerated expansion and will be supported with earnings growth.
“Over the long term, wealth creation would be done by equities and one can always partake in this opportunity,” he said.
Also read: Nifty scales 18,300, Sensex summits 61,000: Five factors behind the rally
Poonam Tandon, chief investment officer at IndiaFirst Life Insurance Company, agreed with Nath, saying they remain positive on the markets.
“Various government measures – production-linked incentive schemes, asset monetisation plan, infrastructure thrust and monetary policy support will continue to aid the economic recovery,” she said. “This, combined with increasing vaccination, strong corporate balance sheets, corporate tax reduction effected earlier, and improving demand conditions, will drive earnings growth.”
Sanjiv Bhasin of IIFL said the current euphoria will remain but it is difficult to predict Sensex levels.
“The market will watch corporate earnings and the festive season before moving ahead,” he said.
The Covid-19 pandemic appears to under control now, with the number of cases declining globally as the pace of vaccination picks up. India is expected to complete the administration of 1 billion vaccine doses soon. So far, 968.2 million vaccine doses have been administered across the country and over 277 million people are fully vaccinated.
Corporate earnings and provisional numbers announced so far have been in line with expectations or better, which the market has started pricing in now, experts said.
“The Q2 earnings season seems to have started on a strong note, with a host of IT majors posting robust numbers, accompanied with positive commentary on the outlook,” said Milind Muchhala, executive director at Julius Baer. “The markets, in the next couple of weeks, will take cues from the progress of the earnings season, although the expectations remain of strong earnings momentum to continue. Any disappointment in results could lead to some intermittent volatility”
The recent privatisation of Air India has lifted sentiment and raised hopes of further divestment in state-owned companies. Last week, Tata Sons won the bid to acquire Air India for Rs 18,000 crore. Subsequently, PSU stocks have seen a good runup in prices after a long time. The BSE PSU index has gained 24 percent over almost the past two months.
“The recent successful privatisation of Air India is raising hopes of kickstarting divestment of several other PSUs lined up – this has a dual benefit in the form of better valuations for the PSU pack and that would lead to better availability of resources for the government to deploy more productively,” said Muchhala.Disclaimer: The views and investment tips by experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.