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

News Snippets

  • Supreme Court sentences Congress leader Navjot Singh Sidhu to one year rigorous imprisonment in the 1988 road rage case
  • Home Minister Amit Shah says rights should not be demanded before fulfilling responsibilities and that universities are no place to wage ideological battles
  • NIA court convicts JKLF chief Yasin Malik in terror funding case after he pleads guilty of all charges
  • A study backed by PM-EAC has recommended universal basic income and urban job guarantee and greater spend on social sector schemes
  • Supreme Court rules that the decisions of the GST Council are not binding on the Centre and the states, leaving the door open for states to levy further taxes
  • After sustained campaign by BJP MP Arjun Singh, the Centre today withdrew the jute price cap order, industry welcomes move
  • Akasa Air might postpone its July launch due to late arrival of aircrafts
  • Metro Cash & Carry decides to sell Indian operations. All major players, including Reliance retail and Amazon, are likely to bid
  • Local and global cues spook the markets on Friday - Sensex crashes 1416 points to 52792 and Nifty by 430 points to 15809
  • IPL: RCB crushes GT by 8 wickets as Virat Kohli returns to form with a well-made half century
  • Nikhat Zareen is world champion in flyweight category. Wins gold at Women's World Championships at Instanbul
  • Supreme Court uses its special powers under Article 124 to release A G Perarivalan, a Rajiv Gandhi assassination convict
  • Indrani Mukherjea, prime accused in the Sheena Bora murder case, gets bail from Supreme Court after 6.5 years in jail
  • Hardik Patel quits Congress, says top leaders distracted by mobile phones and state leadership busy arranging 'chicken sandwiches' for them
  • Anil Baijal resigns as Lieutenant Governor of Delhi citing "personal reasons"
Nikhat Zareen is crowned world champion in the flyweight (52Kg) category at the Women's World Championships in Istanbul /////// Supreme Court sentences Navjot Singh Sidhu to rigorous imprisonment of one year in the road rage case /////// Sunil Jakhar, who quit the Congress a few days ago, joins the BJP
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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