Bulls continued their March on Dalal Street for the second straight session today amid a rally in global markets, fall in daily coronavirus cases below 1 lakh for the fourth consecutive day and early arrival of monsoon in the country.
Sensex zoomed 341 points to scale a record high of 52,641 in trade today against previous close of 52,300. Nifty rose 98 points to lifetime high of 15,835 against previous close of 15,737. Market cap on BSE rose to a record high of Rs 231.52 lakh crore today, clocking a gain of Rs 129.66 lakh crore or 127.29% compared to the March 23 low of last year.
On March 23, 2020, BSE market cap fell to Rs 101.86 lakh crore 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.
During the session, Sensex hit an intraday low of 25,880 and Nifty fell to 7,583.
With a significant rally in stock market and investor wealth in over 14 months, the market looks set to reap gains of unlocking of the economy amid a rise in number of people being vaccinated for the deadly coronavirus infection.
However, some experts are circumspect about the prospects of the current rally and advise investors to tread the equity market space cautiously. Here's a look at what analysts said about the today's record-breaking rally and their outlook on the market.
Amar Ambani, Senior President and Head of Research - Institutional Equities, YES Securities said," The stock market is solely focused on the future. Hopes of a quick economic revival post unlock and expectations of large number of adult population vaccinated in 2021, are keeping markets excited. Q4 FY21 earnings have been encouraging, even after adjusting for the low base of March 2020. The broader market is very healthy. It is very likely that the top 10 heavyweights of the Sensex, which have been dormant for some time, will begin to participate. Already RIL has resumed its up move after a six month lull. This will add to the strength of Indian equities. Our target for Sensex is 60,000 by December 2021."
Commenting on the future outlook of the market, Rahul Sharma - Head, Technical and Derivatives Research, JM Financial Services said, "Falling US bond yields along with supportive global cues ensure Nifty didn't break key support levels. Good monsoon, improving Covid situation & falling VIX should keep markets driving higher."
Exercising a cautious note over the current rally, VK Vijayakumar of Geojit Financial Services said the exuberance in the mid and small-cap space is an area of concern.
"But markets can over-react proving the sceptics wrong in the short run. In 2017 the small index rose around 60%. The froth was removed in 2018 with big pain to the late entrants. Leading financial, IT, pharma and metals are on a strong wicket. Stay invested in these segments while exercising caution when investing in small-caps," Kumar added.
AR Ramachandran, Co-founder & Trainer, Tips2Trades said, "Positive global markets and reducing Covid cases along with the easing of lockdown in several states has ensured that broader indices like =Sensex and Nifty have hit another all-time high today. Technically, Sensex has reached its overbought levels, and investors are advised to keep booking profits at current levels. 52170 will act as strong support for the coming week. "