oppn parties Stock Markets: Indices And Market Capitalization At All-Time Highs

News Snippets

  • Maratha quota bill likely to be tabled in Maharashtra assembly today
  • Arvind Kejriwal skips ED summons for the 6th time, says the case is in court and will follow court's decision
  • PM Modi says UP has gone from 'red tape' to 'red carpet' in 7 years of 'double engine' government
  • Farm unions reject government offers, to resume Delhi march from today
  • Centre says some Aadhar cards in Bengal 'deactivated' due to technical glitz, will be activated back soon
  • Supreme Court stays LS privilege panel summons to Bengal officials over BJP MP Sukanta Majumdar injury case
  • Supreme Court junks Sandeshkhali petition, says it cannot be compared to Manipur, asks petitioner to approach Calcutta HC
  • Supreme Court gets tough on Chandigarh mayoral elections, asks for ballot papers and video footage, does not order re-election
  • Government starts withdrawing old small tax demands, up to Rs 25000 per entry till FY 2009-10 and up to Rs 10000 per entry from FY 2010-11 to FY 2014-15 with an overall ceiling of Rs 1 lakh per tax payer
  • Stocks remained positive on Monday: Sensex gained 281 points to 72708 and Nifty 81 points to 22122
  • Jasprit Bumrah likely to be rested for 4th Test while K L Rahul may be back
  • FIH Pro League hockey: India beat Spain 8-7 in shootout
  • SP leader Salim Sherwani, miffed at no Muslim candidate given RS ticket, quits party
  • Army going for big (Rs 57000cr) upgrade in combat vehicles to replace T-72 tanks
  • Mamata Banerjee says the BJP is doing nothing to resolve the Sandeshkhali dispute but instead fanning the fires to escalate it
History created in Supreme Court as Chandigarh mayoral poll ballots counted in court, judges declare AAP candidate Kuldeep Kumar winner after taking into account the votes defaced by returning officer Anil Masih
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Stock Markets: Indices And Market Capitalization At All-Time Highs

By Ashwini Agarwal
First publised on 2021-06-12 06:19:09

The Sensex had hit its then all-time high of 52517 points on February 16, 2021 as the first wave had all but gone and the second wave was neither on the radar nor was being talked about. Everything was open, GST collections were inching up to record highs every month, other economic data also showed that recovery was on track, the Covid vaccination drive had begun and was one month old by then and there was a positive vibe in the economy. But then, disaster struck. The ferocity of the second wave took everyone by surprise and when restrictions started being imposed in many states, the markets were despondent.

Yesterday, June 12, 2021, the Sensex hit 52643 in intraday trade to surpass the earlier figure. It closed at 52475 which was its all-time high closing. The Nifty also closed at an all-time high of 15799. The market capitalization of BSE stood at 233.7 lakh crore, another all-time high figure. As the second wave recedes (it is now down to one-fourth of its peak) and as states press the unlock button and as the vaccination drive picks up after a lull, market operators see this as a sign of rapid economic recovery. The current rally, though fuelled by foreign fund buying initially, is now being sustained by domestic funds. Selected shares are making huge gains.

But with experts predicting a third wave and with the middleclass grappling with financial distress, is the rally premature? Will demand pick up exponentially and will companies post good results in the short term to sustain this rally? There is no doubt about the resilience of the Indian economy and it will bounce back in time, but at current valuation, some shares definitely look heavily overpriced. Further, with the government not showing any immediate inclination of investing in infrastructure, recovery will be slow. This is proved by slow credit offtake as entrepreneurs have turned risk-averse.

Pic courtesy: investinghaven.com