oppn parties Stock Markets: Indices And Market Capitalization At All-Time Highs

News Snippets

  • The Indian envoy in Bangladesh was summoned by the country's government over the breach in the Bangladesh mission in Agartala
  • Bank account to soon have 4 nominees each
  • TMC and SP stayed away from the INDIA bloc protest over the Adani issue in the Lok Sabha
  • Delhi HC stops the police from arresting Nadeem Khan over a viral video which the police claimed promoted 'enmity'. Court says 'India's harmony not so fragile'
  • Trafiksol asked to refund IPO money by Sebi on account of alleged fraud
  • Re goes down to 84.76 against the USD but ends flat after RBI intervenes
  • Sin goods like tobacco, cigarettes and soft drinks likely to face 35% GST in the post-compensation cess era
  • Bank credit growth slows to 11% (20.6% last year) with retail oans also showing a slowdown
  • Stock markets continue their winning streak on Tuesday: Sensex jumps 597 points to 80845 and Nifty gains 181 points to 24457
  • Asian junior hockey: Defending champions India enter the finals by beating Malaysia 3-1, to play Pakistan for the title
  • Chess World title match: Ding Liren salvages a sraw in the 7th game which he almost lost
  • Experts speculate whether Ding Liren wants the world title match against D Gukesh to go into tie-break after he let off Gukesh easily in the 5th game
  • Tata Memorial Hospital and AIIMS have severely criticized former cricketer and Congress leader Navjot Singh Sidhu for claiming that his wife fought back cancer with home remedies like haldi, garlic and neem. The hospitals warned the public for not going for such unproven remedies and not delaying treatment as it could prove fatal
  • 3 persons died and scores of policemen wer injured when a survey of a mosque in Sambhal near Bareilly in UP turned violent
  • Bangladesh to review power pacts with Indian companies, including those of the Adani group
Devendra Fadnavis to be the next chief minister of Maharashtra after Eknath Shinde agrees to join the government as deputy CM
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Stock Markets: Indices And Market Capitalization At All-Time Highs

By Ashwini Agarwal
First publised on 2021-06-12 06:19:09

The Sensex had hit its then all-time high of 52517 points on February 16, 2021 as the first wave had all but gone and the second wave was neither on the radar nor was being talked about. Everything was open, GST collections were inching up to record highs every month, other economic data also showed that recovery was on track, the Covid vaccination drive had begun and was one month old by then and there was a positive vibe in the economy. But then, disaster struck. The ferocity of the second wave took everyone by surprise and when restrictions started being imposed in many states, the markets were despondent.

Yesterday, June 12, 2021, the Sensex hit 52643 in intraday trade to surpass the earlier figure. It closed at 52475 which was its all-time high closing. The Nifty also closed at an all-time high of 15799. The market capitalization of BSE stood at 233.7 lakh crore, another all-time high figure. As the second wave recedes (it is now down to one-fourth of its peak) and as states press the unlock button and as the vaccination drive picks up after a lull, market operators see this as a sign of rapid economic recovery. The current rally, though fuelled by foreign fund buying initially, is now being sustained by domestic funds. Selected shares are making huge gains.

But with experts predicting a third wave and with the middleclass grappling with financial distress, is the rally premature? Will demand pick up exponentially and will companies post good results in the short term to sustain this rally? There is no doubt about the resilience of the Indian economy and it will bounce back in time, but at current valuation, some shares definitely look heavily overpriced. Further, with the government not showing any immediate inclination of investing in infrastructure, recovery will be slow. This is proved by slow credit offtake as entrepreneurs have turned risk-averse.

Pic courtesy: investinghaven.com