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

News Snippets

  • In a first, the Supreme Court recognizes marital rape, although for the limited purpose of allowing married women the right of abortion up to 24 weeks if they conceived as a result of forced sex by their husbands
  • Air India cuts discounts on base fare to students and senior citizens from 50% to 25%
  • Mallikarjun Kharge and Digvijay Singh are being touted as frontrunners to take on Shashi Tharoor in the elections for the post of Congress president
  • Sonia Gandhi will decide who will be Rajasthan CM if she feels there is a need to change guard after the near-rebellion by MLAs in the state
  • Ashok Gehlot bowed out of the race for being Congress president after meeting Sonia Gandhi
  • India has moved to the 40th spot in the innovation index, up 6 spots from last year
  • DGGI has alleged that top insurance companies, banks and NBFCs has committed a fraud of Rs 800cr by claiming input tax credit without underlying supplies
  • The Centre will borrow Rs 10000cr less than planned earlier due to good revenue collections
  • At $23.9bn, India's current account deficit widened to 2.8% in Q1, the worst in four years
  • Stocks continue to flounder on Thursday: Sensex sheds 188 points to 56409 and Nifty 40 points to 16818
  • The 36th National Games were declared open on Thusrday by PM Modi in front of a record crowd in Motera near Ahmedabad
  • Jasprit Bumrah most likely to miss T20 World Cup due to recurrence of back injury
  • PFI's political wing, the SDPI is on EC radar and action will follow soon if discrepancies are detected
  • Ashok Gehlot to meet Sonia Gandhi today, says all issues will be sorted out soon
  • Referring to the PFI ban, most Muslim organizations ask the government to take similar action against right wings organizations like the RSS, Bajrang Dal, VHP and the like
In a landmark order, Supreme Court rules that all women, married or unmarried, are entitled to safe and legal abortion up to 24 weeks of pregnancy as per the MTP Act
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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