The Sensex surged 872 points to close at a record peak

5 August 2022
3 mins read
The Sensex surged 872 points to close at a record peak

An Overview

On Tuesday, India’s benchmark indices closed at new all-time highs. The BSE Sensex ended the day at a new all-time high of 53,823.36, up 872.73 points or 1.65%. Likewise, the broader Nifty50 index rose 242 points, or 1.52%, to a new high of 16,126.65.

Earlier in the trade, both indices reached new all-time highs. The Sensex reached 53,887.98, while the Nifty crossed the 16,000 barrier to reach an all-time high of 16,146.90. In intra-day trading, the BSE MidCap and SmallCap indexes both touched new highs of 23,443 and 27,232 points, respectively. They did, however, finish up 0.2 percent higher on average. With the exception of the media and metals indices, all sectors ended the day in the black.

Gainers and losers

Top Nifty gainers included Titan, HDFC Ltd, IndusInd Bank, and SBI, while laggards included JSW Steel, Grasim, Bajaj Auto, and Shree Cement.

The top gainers on the Sensex were Titan Company, Housing Development Finance Corporation (HDFC), Nestle India, IndusInd Bank, Ultratech Cement, Bharti Airtel, State Bank of India (SBI), Sun Pharma, and HUL. The top index losers were Bajaj Auto, Tata Steel, and NTPC.

Intraday Trading

According to BSE data, investors gained Rs. 2.3 lakh crore as a result of the sharp surge. In intra-day trading, the Sensex jumped 937 points to a new high of 53,888 on the BSE, headed by Titan Company (up 4%), HDFC, IndusInd Bank, Sun Pharma, SBI, and Nestle India. It trimmed its gains slightly and closed at 53,823, up 873 points or 1.65%.

Rupee Value

In terms of the US dollar, the rupee rose 6 paise to settle at 74.28. On Tuesday, the native currency began flat versus the US dollar despite careful trading.

Markets around the world

As the effects of the swift Delta coronavirus type on the global rebound stoked worries that the prognosis might not be as rosy as previously believed, Asian markets were uneven Tuesday and oil extended losses. China’s onslaught on Information technology, private education, and household sectors has raised doubts in Hong Kong and Shanghai, developing worries that regulators would pursue other businesses.

Current surge is similar to the bull market that lasted from 2003 to 2008

Six bull trends have occurred in Indian stock markets during the last three decades, including the current one. Apart from the 2003-08 bull market, the other four bull markets have averaged 72 weeks in length. Meanwhile, the present surge has only been going for 64 weeks. Given the likelihood of a new profit cycle, the 2003-08 bull market period could serve as a model for the current bull market. Between April 2003 and January 2008, the stock market rallied for 246 weeks (nearly five years).

Although the bulls have dominated stock markets around the world, India’s position has been superior to that of other emerging countries. Nevertheless, this bull market has outperformed the prior five by 23 percent, compared to 52 percent in each of the previous five bull markets. This causes various investors to anticipate that India would likely dominate emerging markets in the months ahead.

Excessive valuations?

Many think that domestic stock prices are currently overvalued. Due to decreased results, the price-earnings ratio may not be the best indicator. The current bull market began with a similar multiple to previous bull markets. At the commencement of this market boom, the P/E ratio was greater than the average of preceding bull markets.