Investor wealth has zoomed by Rs 96.57 lakh crore from the four-year low equity market hit in March 2020. Market cap on BSE, which crashed to Rs 101.86 lakh crore on March 23 last year, reached 198.43 lakh crore today. The rise in market cap came after Sensex and Nifty closed at record highs today, enthused by investor sentiment arising from Budget 2021. The 30-stock Sensex closed above the key 50,000-mark for the first time ever amid heavy buying by foreign funds and positive global cues.
Intra day, Sensex touched a record high of 50,526. Later, the benchmark ended at 50,255, up 458.03 points or 0.92 per cent. Nifty closed 142 points or 0.97 per cent higher to a record of 14,789. Earlier, the index touched an all-time high of 14,868 during the day.
With record close today, Sensex has gained 24,274 points or 93.42% from March 23 low. Nifty too has risen 94.33% or 7,179 points during the same period.
On March 23, Sensex and Nifty hit four-year low after rising number of cases in India and the resultant lockdown in a majority of states took a heavy toll on the financial markets. While Sensex closed 3,934 points lower at 25,981, Nifty ended 1,135 points lower at 7,610.
However, the market gradually recovered on the back of quality stocks available at very attractive valuations.
Other factors which led the market to record highs are manufacturing of coronavirus vaccines, results of US presidential election, hopes of economic recovery, expectations of additional stimulus in the US and consistent FII inflows since November 2020. The Budget presented by Modi government on February 1 too caused the market to rally as proposals to increase capex aimed to take the Covid-hit economy out of recession brought bulls back on Dalal Street. In the last three sessions, Sensex has risen 3,969 points and Nifty climbed 1154 points.
Budget proposals such as raising 34.5 per cent in capex to Rs 5.54 lakh crore in the fiscal year 2021-22, voluntary vehicle scrappage policy, hike in FDI limit in insurance to 74%, and divestment and re-capitalisation plan for PSU banks have brought bulls back on the Dalal Street.
Before Budget on February 1, Sensex lost 3,506.35 points or 7.04 per cent between January 20 and January 29 after investors booked profit ahead of Budget and weak global markets led to negative sentiment on Dalal Street. Similarly, Nifty declined 1,010.10 points or 6.89 per cent during the period.
The six-session loss had led to erosion of market wealth by Rs 11.58 lakh crore.
However, the Budget rally has increased investor wealth by Rs 12.31 lakh crore, thereby erasing all losses of previous six sessions.