Indian equity indices Sensex and Nifty opened at all-time record high with Sensex breaching the 50,000 mark. On Thursday morning, Sensex rose to as much as 334 points and hit the new all-time high of 50,126 while the Nifty rose 92 points to a high of 14,736. After slumping down to a low of 25,638 in March 2020, the markets have nearly doubled in 207 trading sessions and just about more than 10 months.
All the sectors in the equity indices were trading in green when the markets opened on Thursday. On the sectoral side, Nifty Auto, Nifty Bank, Nifty Metal and Nifty Pharma were all showing growth. On Nifty50, Tata Motors, Bajaj Auto, Eicher Motors, Hero Motocop and Reliance Industries were among the few companies that were in green. While HDFC, Adani Ports, Mahindra & Mahindra, HDFC Bank were showing losses.
Analysts are stating the bullish rally is caused due to SEBI’s approval to Reliance Industries 24,713-crore deal to buy Future Group’s assets. The rally in the Sensex and Nifty markets is also looked at as the direct effect of the swearing-in ceremony of the new US President Joe Biden. Following the inauguration of Joe Biden as the 46th President of the United States, the US stocks too closed at an all-time high on Wednesday.
Other reasons that drove Sensex to breach the 50,000 mark:
Impressive Corporate Earnings
Analysts are of the opinion that the strong earnings by companies such as TCS, Wipro, Infosys, HDFC Bank are fueling the increasing growth on the equity indices.
Optimism around Union Budget 2021
Investor sentiments are observed to be optimistic as they remain hopeful towards bold economic policies and reforms in the upcoming Budget 2021-22 that will be presented by Finance Minister Nirmala Sitharaman. The Union Budget 2021-22 will be presented on February 1.
IPO Capital Push
The initial public offering for Indian Railway Finance Corp (IRFC) was subscribed 3.4 times on Wednesday. The IRFC public offering has a total volume of Rs. 4,633 crore. Additionally, the IPO of Sequoia-backed Indigo Paints was also subscribed 2.3 times on the second day of the IPO issue.
History of Sensex
The Indian equity index Sensex was launched in January 1986 with a base value of 100 and the base year of 1978-79. The first few companies that traded in Sensex were Hindalco Industries, ITC, Mahindra & Mahindra, Reliance Industries, Nestle India. These companies are still part of the Indian equity index.
Over the course of years, Sensex and the traders who worked on the Dalal Street saw phases filled with volatility. This includes the volatility brought by Harshad Mehta’s scam in 1992, the dot-com bubble right at the brink of the old millennium, and the recession caused by the housing crisis in 2008.
Sensex hit the 25,000 mark for the first time in 2014 after the Bhartiya Janta Party secured a majority in the elections. On June 5, 2014, it closed at 25,019. Since 2014, the top 10 gainers on Sensex by percentage have been Hindustan Unilever, Infosys, Reliance Industries, HDFC Bank, TCS, Maruti Suzuki India, HDFC, Asian Paints, Dr. Reddy’s Laboratory, ICICI Bank.