Sensex Jumps 10,000 Points to Hit 80,000 in Record Time

The BSE Sensex achieved its fastest-ever 10,000-point journey, taking just 138 trading sessions to move from 70,000 to 80,000 points. The benchmark index reached an intra-day high of 80,074.30 during the morning session on Wednesday. The Sensex had crossed the 70,000 mark on December 11, 2023. Interestingly, the barometer took only a little over five years to double from 40,000 to 80,000.

Sauvik Saha, an analyst at DSP Mutual Fund, attributed the rally to several factors, including recent election results and the inclusion of Indian government bonds in the JP Morgan index. He noted that post-election conditions remained stable, supported by ongoing improvements in indicators such as the current account deficit (CAD), Purchasing Managers' Index (PMI), and GST numbers.

Investor sentiment was further bolstered as Foreign Institutional Investors (FIIs) entered a buying mode, contributing approximately $3 billion in recent sessions. Despite consistent activity from Domestic Institutional Investors (DIIs), the resurgence of foreign investors has significantly boosted investor confidence, according to market players. 

Additionally, expectations of increased weightage for Indian stocks in the MSCI index are anticipated to attract more FII inflows, further bolstering market sentiment. Investors are optimistic about policy continuity under the coalition government ahead of the budget, which has reinforced positive market sentiment, added Saha.

In June, both Sensex and Nifty gained around 7 percent each while BSE MidCap and Smallcap advanced over 8 percent and 10 percent respectively.

Read Sensex Crosses 80,000 for the First Time, Nifty Reaches New Peaks; HDFC Bank Gains on Positive Global Cues

Shrikant Chouhan, Head of Equity Research at Kotak Securities, commented, "Sensex crossing the 80,000 mark is a significant achievement for the Indian stock market. Sixteen years ago, it was at 8,800 on the day Lehman Brothers, a leading bank in the US markets, crashed. This represents a ninefold return over 16 years. Four years ago, during the Covid-19 pandemic, it was at 26,000, which seems unreal but is true. This demonstrates that equity markets perform well in the long run, requiring patience and confidence in investing and holding. Based on the current domestic macros, we advise continuing systematic investments in equities with a long-term perspective."

Analysts believe that India is currently at all-time high levels from both macro and micro perspectives. They highlight the attractiveness of large private sector financials due to their lower valuations compared to historical averages. Across various sectors, they foresee opportunities for mean reversion. However, they note that largecaps and megacaps offer better value than midcaps and smallcaps overall.