Mumbai:Positive global cues and expectations of healthy quarterly results along with that of a supportive Union Budget FY22 powered the ascent of India's barometer index -- the S&P BSE Sensex -- to cross the 50,000-mark on Thursday.
Coming a day after Joe Biden's inauguration as US President, the BSE Sensex mirrored its Asian counterparts in having a gap-up opening.
In fact, the positivity sentiment led it to open above the 50,000-mark. Gains of the last 5,000 points in Sensex has come in just 32 trading sessions.
Around 10.35 a.m., the 30-share Sensex was trading at 50,090.14, higher by 298.02 points or 0.60 per cent from its previous close of 49,792.12. It opened at 50,096.57 and touched a fresh all-time high of 50,126.73 points.
The Nifty50 on the National Stock Exchange (NSE) also touched a new record high of 14,738.30 points. It was trading at 14,728.60, higher by 83.90 points or 0.57 per cent from its previous close.
Healthy buying was witnessed in auto and telecom stocks. A positive trend in the global markets also supported the indices on Thursday.
The top gainers on the Sensex were Bajaj Finance, Bajaj Finserv and HCL Technologies.
Further, rise in the shares of index-heavyweight Reliance Industries also lifted the Sensex. RIL shares were trading at Rs 2,077.50, higher by Rs 22.65 or 1.10 per cent from its previous close.
Reasons for the stock market rally
The bull run on D-Street was largely on the back of favourable global cues as investors hoped for more economic stimulus from new US President Joe Biden.
Moreover, expectations of an even faster economic recovery on the back of the vaccination programme have been cited as other factors for the up-move.
Besides, easy liquidity conditions across the global have been funnelling into India's market, as FIIs' shore up their stakes and pump-up this rally.
Advice for retail investors
On the strategy to undertake after sensex crossed 50K mark, Viral Bhatt, Founder of Money Mantra said, "The 50,000 mark is just a number but an important one. Investors should not time the market, but spend time in the market."
Viral Bhatt, an expert on personal finance, said that financial goals are most important and advised to not only look at sensex but also check broad-based market, i.e., how mid-cap and small-cap companies perform.
"Asset allocation is the key of all time. If goals are nearer, then book the profits and shift towards debt. If you are thinking to enter in markets, invest in debt first and when the sensex falls, transfer your money from debt to equity. And if you are a long term player, just celebrate the 50,000 mark and move on," he added.
Experts' opinion on the 50k breach
Deepak Jasani, Head of Retail Research at HDFC Securities said, "Expectations of 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."
According to Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services: "Sensex touched the historical levels of 50,000 today for the first time ever. Indian markets have been witnessing strong momentum over the past few months on the hopes of a faster economic recovery after the pandemic lockdown. Also positive global cues, sustained FII inflows and strong corporate earnings kept the sentiments high."
"Buzz around the upcoming Budget has also added strength to the markets. The Budget could potentially lay the foundation for a long term economic growth path," Khemka added.
Besides, Likhita Chepa, Senior Research Analyst at CapitalVia Global Research said: "Since the March'2021 lows of Covid-19, there has been a one-way rally and the markets have grown almost 100 per cent from the March lows. Important events to watch out for are the earning announcements for Q3 and then the general budget from which the expectation is huge. So far, the results have been very good and in-line with the street expectations because of which, we have seen rally in IT and now we are seeing the same in banking as well."
"On-time execution of vaccination programme and the expectations of reaching a conclusion on farmer's protest are some of the reasons for which market is in a cheerful mode."
Other Asian stock market
Asian stocks rose to new record highs tracking US markets as investors hoped for more economic stimulus from newly inaugurated US President Joe Biden to offset damage wreaked by Covid-19 pandemic.
MSCI's broadest index of Asia Pacific shares outside Japan touched record highs and was last up by 0.85 per cent with markets across the region posting gains.
Hong Kong's Hang Seng breached the 30,000 level and rose by 0.31 per cent while Japan's Nikkei was up by 0.72 per cent. The rises in Asia followed fresh record highs on Wall Street overnight.
The Dow Jones Industrial Average rose by 0.83 per cent, the S&P 500 gained by 1.39 per cent and the Nasdaq Composite added 1.97 per cent.
(Inputs from agencies)
