Gujarat Exclusive > National-World > Sensex crosses 50k-mark for the first time, profit-booking drags it down

Sensex crosses 50k-mark for the first time, profit-booking drags it down


The Indian stock markets are on a roll for the past few weeks, with the BSE benchmark index, S&P BSE Sensex, on Thursday creating history by crossing the 50,000-mark. It is being seen as a major development and an indicator of the positive market sentiments globally since the COVID-19 pandemic ravaged the global economy last year.

While the market opened with a bang at 50,096 and went on to touch 50,184, it even declined to 49,398, eventually to close at 49,624—a fall of 0.34 per cent. The decline was due to profit-booking by investors.

Meanwhile, analysts have warned investors that there could be short-term correction if the Union budget does not meet the expectations of the market.

Journey so far

The journey of Sensex has not been linear and several scams such as Harshad Mehta and Satyam had resulted in the benchmark index crashing. The Sensex crossed the 1,000-mark in 1990. Around 2006, it crossed the 10,000-mark. It crossed the 20,000-mark by 2007-08. Sensex crossed the 40,000-mark around 2018.

However, due to the COVID-19 pandemic, Sensex declined to multi-year lows of 25,638.90 in March 2020. As the global economy recovered, the Sensex also registered a faster recovery.

RIL a major contributor

Reliance was a major contributor to Thursday’s strong market rally that helped Sensex cross the 50,000-mark. Reliance shares are trading almost 3 per cent higher after the market regulator Sebi gave approval to its deal with Future Group to acquire retail assets worth Rs 24,713 crore.

While Sebi has laid down some conditions for the deal, Reliance is now one step closer to acquiring the Future’s retail assets — a step that would help it gain a significant advantage over Amazon in the battle for retail dominance in India.

Global equity benchmarks at record highs

On Thursday, domestic stock markets got an additional boost from positive global cues after Joe Biden took charge as the US president.

Global equity benchmarks hit a record high on Wednesday as investors around the globe expect additional stimulus from the newly inaugurated Joe Biden administration. Last week, the Biden laid out a $1.9 trillion stimulus package proposal to boost the US economy and speed up distribution of coronavirus vaccines in the US.

Corporates posted profit

While domestic markets had been growing in optimism since last year, Indian shares have got a fresh boost during the third-quarter earnings season. Many companies including major IT firms have posted positive earnings and their valuations have also increased handsomely.

Since most firms are expected to perform even better in the next quarter with rising economic activity, they have added a massive boost to the stock market.


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