NEW DELHI: It took nearly four months for the Sensex to breach its previous high. Supported by gain made by Reliance Industries, Infosys and TCS, Sensex on Friday touched a record intra-day peak of 52,641.53 points, scaling its previous best of 52,516 points (February 15, 2021).
The 30-stock index zoomed 341 points in early trade but ended only 174.29 points or 0.33 per cent higher at 52,474.76. Nifty, on the other hand, rose 98 points intra-day to lifetime high of 15,835 but closed at 15,799.35. Market capitalisation has now risen to a record high of `231.11 lakh crore on the BSE.
During this four month period (Feb 15- June 11), India’s equity market experienced high volatility. When bond yields in the US rose to record high over fear of inflation in mid-April and the second wave of Covid-19 infection devastated India’s healthcare system, Sensex fell as much as 5,000 points from its peak level to 47,300-47,400 levels. If US bond yields go up, foreign institutional investors become cautious and they start selling stocks in emerging markets such as India.
However, gradual recovery in global factors and expectations of a faster recovery from the second wave helped the market to recover in record time. Sensex gained over 3,154 points, or 6.5 per cent, in May 2021.
“Taking cues from the strength of the mother market US where S&P 500 touched record highs, Sensex rose to record highs touching 52641.53 in early morning trade. The rally was led by IT majors TCS, Infosys & HCL Tech with RIL also contributing to the rally. The banking stocks have been on the backfoot on concerns of rising NPAs,” said VK Vijayakumar, Chief investment Strategist at Geojit Financial Services.
At present, bond yields in the US and Euro zone continue to fall. Even as the US consumer price index rose 4.2 per cent in April, investors believe the Federal Reserve would continue to keep interest rates low to maintain the recovery pace.
In the coming weeks, experts say, markets would monitor the spread of monsoon, daily new case count and easing of lockdown curbs. High inflation globally and firm crude oil prices will remain areas of concern.