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Tuesday,19-October-2021

Business

Covid trigger for BSE Sensex’s biggest bull run

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BSE-Sensex

In a perverse kind of way, the Coronavirus pandemic may be the best thing that happened to the Indian stock markets leading to one of the biggest bull runs in recent history with the BSE Sensex scaling 50,000 points mark and doubling from the lows just a few months back in March of 2020.

As convoluted as it sounds but the BSE Sensex has created one of the biggest wealth creation in history for institutional and retail investors within months because of the low created by the coronavirus pandemic.

And at a time when unemployment was at a high during the pandemic and small businesses were struggling, stock market upmove may have been the lifeboat of millions as record first time investors entered the stock market.

More than any other event in recent history, it is the pandemic which has fuelled the longest winning streak for the Sensex to touch the golden 50,000-mark, doubling after March last year.

The gain of the last 5000 points came in just 32 trading sessions. Deepak Jasani, Head of Retail Research, HDFC Securities said, “It is a momentous day for India’s capital markets as the Sensex touched 50,000 on Jan 21. The gain of last 5,000 points has come in just 32 trading sessions. Expectations of turnaround in the economy post Covid vaccinations and continued FPI inflows have led to this kind of gains for Indian markets in a globally low interest scenario. Post the Forthcoming Union Budget we may witness a temporary brake to the uptrend and further upmoves from hereon will depend on the pace of economic and corporate earnings growth and the trajectory of inflation and interest rates in India and the world.”

Joseph Thomas, Head Of Research , Emkay Wealth Management said the valuations look stretched now. “The liquidity expansion by the central bank and the ample FII driven liquidity, a V-shaped recovery of growth aided by the discovery of vaccine, and most recently the change of guard in US have been some of the factors propelling markets higher and higher. As the Sensex crosses the 50,000, the valuations do look stretched. The valuations are a function of earnings and earnings not coming through remains the key risk at the current juncture.”

S. Ranganathan, Head of Research at LKP Securities said, “While global liquidity has been the primary driver of equity markets in 2020, the 50K milestone on the Sensex today clearly reflects the changing face of New India as the reform push together with the pent-up demand post lockdown is getting reflected into earnings of India Inc. proving the prognosis of pessimists wrong. Going forward the recognition of equities as a viable asset class to compound wealth would ensure that domestic money waiting on the sidelines would step in during corrections”.

V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services said the markets are overvalued now. “Markets are barometers of the economy with a potential to discount the future. If this is true, the Indian economy is on a strong recovery path. If the recovery in growth and corporate earnings, currently underway in India, gathers momentum, the markets may further surprise on the upside. But it is important to appreciate that the market is overvalued from the short- term perspective. At high levels, the market is vulnerable to a correction. Investors can utilize the current euphoria to get rid of low-grade stocks from the portfolio,” he said.

Business

No increase in fuel prices for 2nd consecutive day on Tuesday

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Petrol

 Petrol and diesel prices remained unchanged for the second consecutive on Tuesday providing relief to consumers who have been facing a regular increase in fuel prices in the past few months taking the retail rates to historic high levels.

With no revision, the price of petrol in Delhi remained Rs 105.84 a litre and Rs 111.77 per litre in Mumbai, according to a price notification of state-owned fuel retailers. In Mumbai, diesel rates also remained static at Rs 102.52 a litre; while in Delhi it costs Rs 94.57, the same as on Sunday.

The price pause comes after the rates rose for four straight days when the rates of both petrol and diesel rose by Rs 1.40 paise per litre. There was no change in the rates also on October 12 and 13.

Diesel prices have increased on 19 out of the last 25 days taking up its retail price by Rs 5.95 per litre in Delhi.

With diesel prices rising sharply, the fuel is now available at over Rs 100 a litre in several parts of the country. This dubious distinction was earlier available to petrol that had crossed Rs 100 a litre-mark across the country a few months earlier.

Petrol prices had maintained stability since September 5, but oil companies finally raised the pump prices last week. Petrol prices have also risen on 16 of the previous 21 days taking up the pump price by Rs 4.65 per litre.

Crude prices have been on a surge rising over a three-year high level of over $ 85.7 a barrel now. It has softened a bit, falling below $ 85 a barrel now. Since September 5, when both petrol and diesel prices were revised, the price of petrol and diesel in the international market is higher by around $9-10 per barrel as compared to the average prices during August.

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Business

Markets open on a positive note

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Bombay-Stock-Exchange

 The 30-scrip Sensitive Index (Sensex) on Tuesday opened on a positive note during the morning trade.

The Sensex of the BSE opened at 62,156.48 points and touched a high of 62,159.29 points. The Sensex touched a low of 61,964.41 points.

On Monday, the Sensex closed at 61,765.59 points.

The Sensex is trading at 62,061.59 points, up by 296.00 points or 0.48 per cent.

On the other hand, the broader 50-scrip Nifty at National Stock Exchange (NSE) opened at lower note at 18,602.35 points after closing at 18,477.05 points.

The Nifty is trading at 18,549.55 points in the morning.

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Business

Petrol, diesel prices rise again, burn bigger holes in consumers’ pockets

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Petrol

 Petrol and diesel price rose again on Friday taking its retail rates to record high levels across the country affecting consumers this festive season.

Accordingly, in the national capital, petrol and diesel prices increased by 35 paisa per litre to Rs 105.14 per litre and Rs 93.87 per litre, respectively.

In India’s financial capital of Mumbai, petrol became costlier by 34 paisa per litre to Rs 111.09 a litre on Friday, the highest across all the four metro cities. Diesel also costs Rs 101.77 for one litre in Mumbai.

The price hike on Friday is for a second consecutive day after the rates remained static on Tuesday and Wednesday.

Diesel prices now have increased on 17 out of the last 21 days taking up its retail price by Rs 5.25 per litre in Delhi.

With diesel price rising sharply, the fuel is now available at over Rs 100 a litre in several parts of the country. This dubious distinction was earlier available to petrol that had crossed Rs 100 a litre mark across the country a few months earlier.

Petrol prices had maintained stability since September 5 but oil companies finally raised its pump prices last week and this week given a spurt in the product prices lately. Petrol prices have also risen on 14 of the previous 17 days taking up its pump price by Rs 3.95 per litre.

OMCs had preferred to maintain their watch prices on global oil situation before making any revision in prices. This is the reason why petrol prices were not revised for last three weeks. But extreme volatility in global oil price movement has now pushed OMCs to effect the increase.

Crude price has been on a surge rising over three year high level of over $84.5 a barrel now. Since September 5 when both petrol and diesel prices were revised, the price of petrol and diesel in the international market is higher by around $9-10 per barrel as compared to average prices during August.

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