The S&P BSE Sensex scaled historic 75,000 points level for the first time ever on Tuesday, as investor optimism continued to drive markets to new highs. Sensex took only 81 trading sessions to rise from 70,000 to 75,000 points, as against 110 days it took for the previous 5,000 points gain.
This was the fourth-fastest 5,000 points gain for Sensex ever. Mukesh Ambani’s Reliance Industries was the biggest contributor to the Sensex’s rally from 70,000 to 75,000 points as the stock contributed over 1,400 points or 30% to these gains, according to Bloomberg data. The other major winners were ICICI Bank, State Bank of India, Tata Motors, and Bharti Airtel.
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On Tuesday, the Sensex rose 0.5% intraday to hit fresh record high of 75124.28 points, before giving up its gains to snap a three-day winning streak. Falling over 440 points from its peak, the Sensex ended the day 0.1% lower at 74683.70 points. Nifty also had a similar day. The 50-stock index hit a lifetime high of 22768.40 points intraday, before closing 0.1% lower at 22642.75 points.
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Sensex and Nifty 50 have now hit lifetime highs in four of the seven trading sessions so far in FY25. The invincible rally, on top of stellar FY24 gains, has caught many by surprise.
Naveen Kulkarni, chief investment officer, Axis Securities PMS, said that though it was expected that benchmark indices will reach a new all-time high in FY25, the pace of the move has been faster than anticipated.
Earlier on Monday, the market capitalization of BSE-listed companies surpassed Rs 400 trillion, in yet another historic day for Indian equity markets. It took only 188 days for the market capitalization of BSE companies to rise from Rs 300 trillion to Rs 400 trillion, compared to 598 days to go from Rs 200 trillion to Rs 300 trillion.
“Government policies and reforms have played a crucial role in fostering a stable environment conducive to market growth. Measures aimed at stimulating the economy, coupled with a focus on digitalization and infrastructure development, have attracted substantial investments,” said Arvinder Singh Nanda, senior vice president at Master Capital Services.
Apart from this, a consistent increase in participation from retail investors has been another factor driving the momentum in the market, experts said.
Nevertheless, the optimism seen in the last few sessions has been driven by expectations of strong corporate earnings performance in Jan-Mar.
“If the earnings season turns out to be disappointing, then the market will correct. However, if there are more upgrades than downgrades in earnings momentum, the market will continue to move upwards,” Kulkarni said.
Meanwhile, the broader market underperformed the benchmark indices for the second consecutive session on Tuesday. The BSE Midcap index fell 0.5% to close at 40,746.60 points, and the BSE Smallcap index ended the day 0.2% lower at 45,935.21 points.
While the overall market sentiment seems to be optimistic, experts recommended that investors either book partial profits or wait for dips to add fresh positions. There could be consolidation in the next few sessions as investors will wait for the earnings season to begin, having factored in expectations of a decent performance, they said.
