June 14, 2021

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Sensex crosses 50,000 : Reasons behind the rapid rise

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Sensex crosses 50,000

Equity indices hit fresh highs today with the BSE Sensex breaching the psychological 50,000 mark. Sensex opened above 50,000 at 50,096 before hitting a high of 50,184 and a low of 49,398 before ending the day at 49,624, lower by 167 points (0.34%).

It has taken the Sensex just 304 days to zoom from 26,000 to 50,000. In the past 3 days, the Sensex has jumped over 1,500 points to cross the 50,000 mark.

Top reasons behind the rally

1. Optimistic Global Cues

Joe Biden was inaugurated as the 46th President of The United States. It is believed that the Joe Biden administration will provide more support for the faltering US economy. This in turn is expected to increase trade with Asia. Nifty and Sensex have mirrored the three major indices of USA, S&P500, Dow Jones and NASDAQ, by hitting fresh highs in today’s session.

2. Strong Corporate Q3 earnings

Over the past week, companies such as HCL Technologies, Wipro, TCS, D-Mart and Infosys declared strong Q3 earnings, beating street estimates and this has been a massive push for the streets.

3. Focus on Budget 2021

The Finance Minister Nirmala Sitharaman will present the Union Budget on February 1st 2020. Investor sentiments have remained largely positive regarding the budget. Many bold reforms too are expected.

4. Rush of IPOs

The Indian Railway Finance Corporation (IRFC) IPO was oversubscribed by more than 3.5 times. The Indigo Paints IPO too was subscribed by more than 2 times at the time of writing. Home First Finance IPO also seems to be resounding success on Day 1. Fresh funds have flown into the market and is increasing market sentiments.

5. Foreign Fund Inflow

Wednesday’s rally was fueled by ₹2.289 crores net foreign fund inflow and Tuesday’s by ₹257 crore inflow. The increased liquidity has pushed the indices to new highs.

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