Sensex@50K! Don’t fear the dip, have faith in Indian story: Experts

What a journey it has been for the benchmark index from 100 mark as on April 1979 to 50,000 mark in Jan 2021, which amounts to a compounded annual returns of just shy of 15.5% over the period of last 43 years.

January 21, 2021 / 12:08 PM IST

Positive global cues, as well as strong results from India Inc in the December quarter, helped Sensex climb Mount 50K with ease on Thursday while Nifty50 also broke above 14700 levels for the first time.

The S&P BSE Sensex has almost doubled from the lows of 25,638 recorded back in March 2020. The average market capitalisation of BSE-listed companies has now swollen to 198 lakh crore (Intraday) as on 21 January.

Considering both Sensex and Nifty are trading at record highs there is a risk of a dip. However, experts rule out a repeat of what happened in 2020. Dips can be used to buy into quality stocks as economic recovery is taking shape and earnings are beginning to rebound.

“It is a momentous day for India's capital markets as the Sensex touched 50,000. The gain of last 5,000 points has come in just 32 trading sessions,” Deepak Jasani, Head of Retail Research, HDFC Securities told Moneycontrol.

Jasani further added that after the Union Budget we may witness a temporary brake to the uptrend and further up moves from hereon will depend on the pace of economic and corporate earnings growth and the trajectory of inflation and interest rates in India and the world.

We have collated views from various experts as Sensex climbs Mount 50K:

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Sandeep Bhardwaj, CEO, Retail, IIFL Securities

We believe equity culture is at an inflexion point in India. With solid research and investing in the right stocks and mutual fund SIPs, investors can benefit. However one should be extremely cautious and not over-leverage at high levels.

Gaurav Dua, Sr Vice President, Head Capital Market Strategy & Investments, Sharekhan by BNP Paribas

What a journey it has been for the benchmark index from 100 mark as on April 1979 to 50,000 mark in Jan 2021, which amounts to a compounded annual returns of just shy of 15.5 percent over the period of last 43 years.

We are at a cusp of a new economic cycle and the business uptrend in India. The pillars of the long term equity rally are in place, i.e., low-interest rates, bank balance sheets on a mend, significant policy reforms along with the recent focus on attracting foreign investments and developing the Indian manufacturing sector.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The smooth transition in the US and President Joe Biden's healing speech lifted the US markets to record highs. This feel-good factor is likely to spread to other markets too.

FII inflows which had declined a bit during the last few days, have again turned strong going above Rs 2200 crores on Wednesday.

Apart from robust FII inflows, another major factor supporting the rally is the impressive corporate results which started in Q2 and continue in Q3.

While enjoying this bull-run, investors should not be carried away by the euphoria. At high levels, markets are vulnerable to corrections.

Taher Badshah - Director and CIO (Equities) - Invesco Mutual Fund to CNBC-TV18

The Indian market has more upside left even post recent run-up. On the valuation front, the Indian market has been trading at the upper end at 22x-23 times.

Conditions surrounding the Indian market getting positive as well which is a positive sign. The Nifty EPS is likely to see a sharp up move in the next 2 years.

Nilesh Shah - MD & CEO - Envision Capital to CNBC-Tv18

It is a historic moment and these are not just highs in terms of levels but also in terms of multiple and valuations. These are highs in terms of record liquidity that we have been receiving from global investors.

We have seen a wonderful start to the December quarter earnings but a lot of growth is coming from margin expansion which one has to see it is sustainable or not.

Abhishek Chinchalkar, CMT Charterholder and Head of Education, FYERS

For the first time ever, Sensex crossed the psychological 50000 mark, boosted by strong overnight cues from Wall Street and Asian markets today. Risky assets worldwide have reacted quite positively post Joe Biden's inauguration as the US President.

Both Nifty and Sensex have surpassed their prior week's high of 14,653 and 49,795, respectively. This, in turn, has negated the Spinning Top candles that formed on the weekly charts last week.

With global risk appetite quite positive, index heavyweight sectors such as banking and IT are showing strength. And as the largest component Reliance Industries resuming its rally after several weeks of consolidation, Indian markets look set to extend gains further in the short-term.





For Nifty, the immediate upside is now at 15000, while for Sensex, the corresponding upside is at 51,500. Immediate support is now placed at 14,650 for Nifty and 49,700 for Sensex.







Joseph Thomas, Head Of Research, Emkay Wealth Management

The liquidity expansion by the central bank and the ample FII driven liquidity, a V-shaped recovery of growth aided by the discovery of the vaccine, and most recently the change of guard in the US have been some of the factors propelling markets higher and higher.

 

Ravi Kumar, Co-founder and CEO, Upstox 

It is a fantastic day for the Indian markets, with the Sensex touching a new high. It's a positive sign for the economy, which is seeing broad-based recovery and an increase in foreign investment.

The Sensex crossing the 50K mark highlights equities as a critical component in an investment portfolio and underscores its importance in long term wealth creation

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Kshitij Anand is the Editor Markets at Moneycontrol.

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