The bull run came on the back of strong cues from global peers and solid Q3 earnings numbers so far.
Sanjhi Soch Beauro –Following optimism among global peers, markets on Thursday breached the mark of 50,000 for the first time. BSE Sensex gained 271 points to cross the historic 50,000 points benchmark, while Nifty Fifty was up 88 points to reach a record of 14,732 points on Thursday morning.
Indian markets opened up on a positive note following the trends in SGX Nifty. SGX Nifty was trading over 60 points higher at 14,706 around 7.10 am, indicating a firm start for benchmark indices.
Reliance Industries shares on Thursday jumped 2% after market regulator Sebi cleared the way to Future Group’s scheme of arrangement and sale of assets to Reliance, based on which the Bombay Stock Exchange also granted its “no adverse observation” report to the ₹24,713-crore deal.
n Wednesday, the indices hit a record high led by IT and auto stocks along with positive global cues. The indices closed in the green for the second day in a row with Sensex ending up 394 points at 49,792, while Nifty closing 0.9% higher at 14,645.
Asian stocks also recorded a new high in line with the overnight gains on Wall Street as investors hoped for more economic stimulus from newly inaugurated US President Joe Biden to offset damage caused by the pandemic.
Naveen Kulkarni, Chief Investment Officer, Axis Securities, said: “Equity markets have staged a significant recovery across the world. The Indian equity market has rallied a whopping 93% to 14,738 from the March lows. Today, Sensex has crossed a physiological benchmark level of 50,000, which is almost double from the March low. This journey has been a remarkable one for the Sensex, with a CAGR of 10% in the last ten years, and the final 10,000 points rally happened in the past couple of months only. Market breadth is in favor of advances, indicating that overall investors’ sentiments have improved, further supported by better than expected Q3 earnings. Apart from this, liquidity is continuing to be in favor of the Indian market. FIIs are continuously buying Indian equities, while the quantum of DIIs selling has reduced significantly in the last few days, which is a positive for overall sentiments. The outlook for earnings has improved with a faster than expected economic recovery. If positive earnings momentum sustains, then we could see more such milestones in the time to come.”
Dr. Joseph Thomas, Head Of Research , Emkay Wealth Management said: “The liquidity expansion by the central bank and the ample FII driven liquidity, a V shaped recovery of growth aided by the discovery of vaccine, and most recently the change of guard in US have been some of the factors propelling markets higher and higher. As the sensex crosses the 50k, the valuations do look stretched. The valuations are a function of earnings and earnings not coming through remains the key risk at the current juncture.”
Meanwhile in the overnight session, US stocks ended on a record high as investors became optimistic that the recent federal spending will revive growth and boost corporate earnings. Aso, the change in leadership in the US also bring renewed hopes as Joe Biden was sworn in as the 46th president of the United States.
The Biden administration is expected to announce nearly $2 trillion US fiscal stimulus plan.
