Sensex drives to 75,000 from 26,000 in 4 years; stocks rally up to 1,375% from Covid lows

BSE Sensex scripted history on Tuesday, April 9 as the BSE's barometer scaled the 75,000 mark for the first time. A number of market pundits had previously predicted Sensex to scale these levels, sooner or later, as the index scaled peaks of 75,124.28 at the opening tick of the session.

The benchmark index has surged about 190 per cent from its covid-19 low at 25,638.90 hit on March 24, 2020 with a number of stock delivering multibagger returns, surging up to 1,375 per cent from their close on March 24. As many as 20 stocks have outperformed the Sensex, while other ten have underperformed the benchmark.

"We also assume that domestic growth in H1FY2025 is likely to remain strong on the back of an acceleration in consumption demand amid election-related spending. Hence, the markets are expected to perform well, with high focus on large-caps which are offering better safety margins in earnings as well as valuations," he said.

The Sensex reaching 75,000 points marks a remarkable recovery from the COVID-19 lows, reflecting the resilience and growth momentum of the Indian stock market. This achievement illustrates the market's rebound and investor confidence in India's economic prospects, said Anirudh Garg, Partner and Fund Manager at Invasset.

In terms of returns, Tata Motors has led the gainers, zooming 1,376 per cent from its covid-19 lows. The blue-chip auto maker has rallied Rs 1,012.95 on Monday from its close at Rs 68.6 on March 24, 2020.

It is followed by another auto major Mahindra & Mahindra, which has jumped about 675 per cent to Rs 2,078.85 from Rs 269.25. Another Tata Group company, Tata Steel, stood third in the list, with a return of more than 500 per cent. The metal major's stock price rallied to Rs 165.15 from Rs 27.18 during the period under review.

JSW Steel (up 495 per cent), Larsen & Toubro (up 437 per cent), IndusInd Bank (up 400 per cent), Sun Pharmaceutical Industries (up 375 per cent), NTPC (up 370 per cent), Titan Company (up 360) and State Bank of India (up 320 per cent) are other biggest gainers in the Sensex pack.

Other stocks like Bajaj Finserv, ICICI Bank, Axis Bank, HCL Technologies, Power Grid Corporation Of India, Ultratech Cement, Reliance Industries, Bharti Airtel, Bajaj Finance and ITC have also outperformed the Sensex, rising between 190 and 275 per cent during the period.

On the contrary, Maruti Suzuki India, Wipro, Tech Mahindra, Infosys, Tata Consultancy Services, HDFC Bank, Asian Paints, Nestle India, Kotak Mahindra Bank and Hindustan Unilever have underperformed the BSE's barometer, with last four names even failing to double investors wealth despite the sharp correction.

Hindustan Unilever is the biggest laggard of the pack, which has risen merely 12 per cent to Rs 2,269.15 from Rs 2,028.75 during the period under review. Kotak Mahindra Bank is also up by only 56 per cent to Rs 1,788 from Rs 1,148.70 in the given period.

Sensex breached the 75,000 mark and the main catalyst behind the current uptrend is the hope of a stronger than expected Q4 corporate earnings which is fuelling the market momentum over the past one week. The uptick is equity markets is seen despite a strong momentum in gold, crude and metals amid Fed rate cut expectations going ahead, said Prashanth Tapse, Senior VP (Research), Mehta Equities.

"Government policies and reforms have been pivotal in providing a stable environment for market growth. Stimulus measures and a focus on digitalization and infrastructure have attracted significant investments. The rise in retail investor participation, along with sustained interest from foreign institutional investors, underscores the broad-based trust in India's potential," he said.

In terms of market capitalization, the 30-share pack has seen a growth of Rs 49.54 lakh crore in the last four years as the total valuations of the 30 constituents in the pack grew to Rs 148.76 lakh crore on April 8, 2024 from 99.21 lakh crore on March 23, 2020. The entire market capitalization of all BSE-listed companies hit the Rs 400-lakh crore mark for the first time on Monday.

Reliance Industries came out to be a standout performer with an addition of Rs 14.12 lakh crore in the cap. Despite underperformance to the Sensex in terms of return, Tata Consultancy Services added around Rs 8 lakh, while HDFC Bank added more than Rs 7.5 lakh crore in the investors kitty. The top three stocks contributed about 60 per cent of the mcap addition.

ICICI Bank, State Bank Of India and Bharti Airtel added over Rs 5 lakh crore each, while contribution of Larsen & Toubro, Infosys, ITC, Tata Motors and Sun Pharmaceutical Industries stood between Rs 3 lakh crore and Rs 4.25 lakh crore on an individual basis during the given period.

Several factors contributed to this market rally. Central banks around the world implemented interest rate cuts, while governments enacted fiscal stimulus packages to bolster their economies during the COVID-19 crisis. This strategy proved effective, leading to a robust economic recovery in India, said Santosh Meena, Head of Research at Swastika Investmart 

"India boasts the fastest-growing economy globally, with a promising future fueled by political stability. We appear to be in the midst of a major bull market, which is likely to persist for the next few years. The Sensex reaching 100,000 seems like a realistic possibility in the near future," he said cuationing investors to prioritise quality stocks while maintaining a long-term approach.