The index has risen nearly 100 percent from its 3-year low of 25,639, hit on March 24, 2020, on the back of the COVID-19 pandemic outbreak.
Benchmark index BSE Sensex hit the 50,000-mark for the first time on Thursday, hitting a record high of 50,140 in morning deals. The index has risen nearly 100 percent from its 3-year low of 25,639, hit on March 24, 2020, on the back of the COVID-19 pandemic outbreak.
The market capitalisation of listed firms on the BSE, too, touched a record high of Rs 199 lakh crore.
The rally is led by liquidity support, consistent FII inflow, hopes of a quicker economic rebound and earnings recovery.
The index first hit the 10,000-mark for the first time in February 2006 then surged 10,000 points to hit 20,000 in October 2007. However, it then took the index nearly 8 years to reach the 30,000-mark in March 2015. The 40,000-mark was then breached 4 years later in May 2019. Since then, it took the index 20 months to reach 50,000-level.
So which stocks contributed the most to Sensex 10,000 points rally since May 2019. Among individual stocks, Asian Paints rose the most, up 98 percent since May 2019, while Infosys, HCL Tech, Bharti Airtel, Nestle, TCS, RIL, Tata Steel, Bajaj Finance rose between 47 percent and 92 percent in this period.
Meanwhile, ONGC, IndusInd Bank, ITC, NTPC, Axis Bank were the top losers in the index down 13-43 percent.
Despite the stellar rally, analysts have advised investors to remain cautious and that some consolidation may be seen around Budget.
"Expectations of a turnaround in the economy post-Covid vaccinations and continued FPI inflows have led to this kind of gains for Indian markets in a globally low-interest scenario. Post the forthcoming 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," Deepak Jasani, head of retail research, HDFC Securities said.
Meanwhile, Jyoti Roy, DVP – Equity Strategist, Angel Broking stated that valuations at current levels are expensive with the Senses trading at P/E multiples of 21xFY22 EPS estimates. While the markets may be expensive at current levels Roy, believes that Indian equities will command a premium. However, she added that the markets on an FY2023 basis, then valuations appear to be more reasonable at 17.5x.
(Edited by : Jomy)