Sensex Hits 50000 Mark For The First Time In Its History
Sensex – also known as the sensitive index which was started back in 1986 with a base price of INR 100, thirty-four years later, has touched a whopping 50000 mark!! Indeed, a moment of pride for all Indians. With the economy still in the doldrums because of a pandemic, Sensex achieving this mark is nothing but spectacular! So, what Sensex exactly measure? Let’s explore
Sensex is nothing but a primary index that indicates the market capitalization of the top 30 companies listed on the mighty Bombay Stock Exchange. Established in the year 1986, this index has indeed come a long way. Being established by BSE, the oldest stock exchange in Asia, this index is highly respected all over the world. After all, BSE is one of the top 10 stock exchanges in terms of market capitalization.
In the early trading hour of Thursday, 21st Jan 2021, Sensex breached the 50,000 mark. The main reason for this historic surge is the good performance of market heavyweights – Reliance Industries Ltd., Bajaj twins, and a few more. A few months back, during the initial phase of the pandemic, Sensex had witnessed a record crash because of the severe lockdown. But, seeing such a dramatic rise reflects the optimism in the recovery of the economy.
While it took 20 long years to complete the first 10k points, the second 10k points were achieved within a year, 432 sessions to be precise. In the year 2019, Sensex crossed 40k points. After crossing this mark, the next 10k points were supposed to be the toughest to achieve considering the situation of the economy, but India achieved that feat in just a year!
So, what are the main reasons for the rise in sensex?
There are a number of reasons which affect the stock price. Let’s look at some main reasons.
The very first is the resuming of various economic activities that were shut down during the pandemic. Almost all the economic activities have resumed, but they still haven’t reached pre-COVID levels, obviously!
Secondly, India – the world’s vaccine capital, started the world’s largest vaccination drive. With time as vaccination gathers speed further rise can be seen.
The stability in US politics and a smooth transition of power also contributed to this rise. There is a sense amongst market traders that there could be an improvement in the geopolitical environment and trade relations.
Also, SEBI approving the Reliance-Future deal, positive corporate earnings are also a few of the many reasons.
According to many pundits, the stock market can be considered as a barometer of the economy. Considering this, it can be considered as a great milestone in India’s growth history. However, markets over-correct in both the positive and negative directions. So, not getting carried away by the euphoria is the key.
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