Sensex soars to record high of 50,000

The benchmark index Sensex, continuing its incessant bull-run breached the 50,000 mark on 21^st January 2021, yet another psychological barrier reflecting a remarkable turnaround from the lows witnessed in March 2020.

The intra-day high of 50,184 represented a 93 per cent jump from the 25,981 low it had crashed to on March 23, 2020, just hours before Prime Minister Narendra Modi issued a nationwide lockdown. Other indices like the NASDAQ and Dow Jones have also rebounded by 86 per cent and 63 per cent, respectively.

The latest surge, in the view of several analysts, reflected the increased optimism among investors on the back of US President Joe Biden being sworn in. During his campaign trail, President Biden had consistently called for greater economic stimulus and with the Democrats now claiming a thin majority in the Senate, hopes of a $1.9 trillion stimulus being passed. With Asian indices broadly tied to Wall Street, the the Indian markets are expected to remain buoyed, at least, till the announcement of the Union Budget in February.

The overall rebound in Indian equities has been largely driven by unprecedented spikes in inflow foreign investment. Despite India officially entering into a technical recession last quarter, foreign portfolio investors have continued to view Indian markets as attractive, evidenced by the $23 billion worth of inflows witnessed in 2020.

The measures implemented by the RBI to boost liquidity in the markets have also been responsible for the sustained rise witnessed across Indian stock indices. Finance Minister Nirmala Sitharaman's declaration that the upcoming budget “will be no like other” has also raised expectations of an expansionary budget in 2021.

Source: Times Now News