The stock market in India is marching ahead, every day, the sentiments on Dalal Street are up and factoring all those positive aspects, the market is breaking records, reporting all-time highs and giving maximum returns to the investors. It just took 8 months for the equity market here in India to cross that 60,000 mark. The 30-share BSE Sensex was trading somewhere around 50,000 in January this year and within in 8 months, the benchmark indices surged to an all-time high of 60,000.
“Sensex at 60000 level! Market has been performing well over the last few quarters owing to huge liquidity, upward earnings cycle, economic revival owing to fading Covid-19 effect. However, market participants should be wary of the rising inflation and resulting removal of liquidity from the system. Rising inflation risk and hence withdrawal of ultra-easy monetary policy by global central banks (mainly Federal Reserve) may trigger a sharp rise in bond yields which can cause risk assets to correct sharply. Hence one can remain invested with a vigilant eye on the move in yields world over which can result in sharp 10-15 per cent correction from the current levels,” Piyush Garg, CIO – ICICI Securities Ltd said.
This is happening at a time, when the COVID-19 infections curve has almost flattened, vaccination is picking up, the economy is clawing back to normalcy, the economic fundamentals are improving- these factors together are leading to a bull run in the market. As per many analysts and keen market watchers, this phase of sustained bull run is similar to the 2003-2007 phase where the bulls ran for almost 2-3 years. So the sustained bull run for next 2-3 years is something can’t be negated.
“BSE Sensex conquering the 60,000 peak is a momentous day to all market participants. The journey has been magnificent since the launch in Jan 1986. The level reflects the strong underlying economy, which is reflected in the strong tax collection recently reported by the government. With vaccination also setting new records, we are in clear skies and have many more peaks to conquer in the months ahead. The only roadblock ahead appears to be the likely tapering announcement by the US Fed. The US 10-year bond has started raising its head, and one needs to keep an eye on that. For India, however, we are in some of the most exciting times ever,” Vijay Singhania, chairman, TradeSmart said.
The markets are enthused, so much so, that this year the benchmark index gained over 25 per cent. With improving economic fundamentals, with dipping Covid-19 cases and with record vaccination, the roadblocks in the supply chain are being knocked out. As per epidemiologists, we can’t let our guard down but India is entering in the stage of endemic, so going ahead, industrial activity will pick up and the market will keep on surging and marching ahead.
The Sensex gained 10,000 points in just a few days. Now, with improved economic condition, and economic fundamentals coupled with sustained bull run in the markets, even 1,000,00 mark does not seem invincible.
Throwing light on ideal investment strategy for investors, Sandeep Bharadwaj, CEO, Retail, IIFL Securities said, “expectations of solid economic recovery and sustained growth in the next couple of years is keeping the bulls enthused. Also from global funds perspective, India remains an attractive destination, especially in the China+1 scenario. Having said that retail investors must have a diversified portfolio at this stage to face any kind of volatility.”
“Sensex mounted the 60k mark as risk appetite improved after fears surrounding Evergrande debt crisis eased. BSE found almost 60 per cent of the stocks advancing in the first hour. But we remain watchful of markets weighing in rate hike prospects as US treasury yields have begun to firm up, following Fed’s taper signals,” Anand James, chief market strategist at Geojit Financial Services said.