Year of milestones and record highs, a look at Sensex journey

Year 2024 has already started becoming the year of milestones and record highs with the Indian market having hit yet another one today! After the benchmark Nifty hit the 22,000 mark just last month, the Sensex hit its 74,000 milestone in intraday deals yesterday (March 6, 2024). Sensex galloped 409 points in the previous session to close above 74,000 for the first time, at 74,086 points.

It took 37 sessions for the Sensex to climb 1000 points since the last milestone of 73,328, hit on January 15, 2023.

Sensex extended gains in today’s session as well with the index adding 159 points in intra-day deals to another new peak of 74,245.17. This is the second straight session in March when the Sensex has hit its peak.

In a recent report brokerage house, Geojit Financial Services highlighted that it has taken Sensex just 65 sessions or 3 months to gain the last 5,000 points from 69k levels to 74k. The index first crossed the 69k mark on December 5, 2023.

Meanwhile, the latest 10,000-point milestone from 64k took place in 172 sessions or 8.3 months, noted Geojit. The index hit 64k for the first time on June 30, 2023.

Meanwhile, Nifty50 also hit its new record high of 22,523.65, up 49.6 points, in intra-day deals. It also hit new highs in the previous as well as today’s session.

The rise comes after data showing India’s GDP during the three months ending in December grew at 8.4 percent. This is the highest among all large economies of the world. According to the India Outlook report by Crisil, released today, the country’s economic progress will be supported by domestic structural reforms and cyclical factors. Crisil anticipates that India could potentially even surpass its growth prospects, aiming to become the world’s third-largest economy by 2031. This growth trajectory positions India to attain upper middle-income status by 2031, with the economy expected to double to USD 7 trillion, said ratings agency Crisil.

“There are some distinct trends in the market now. One, large caps are outperforming mid and small caps. Two, Bank Nifty is emerging stronger led by private sector majors like ICICI Bank, Axis Bank, Ind Sind Bank and Kotak Bank.

Three, regulatory action on some NBFCs has impacted sentiments in the entire NBFC space, which, in turn, is improving sentiments in the high-quality private banking space; the 3.7 percent decline in the small-cap index this week when Nifty appreciated by 0.5 percent is a big underperformance. This trend is likely to continue since valuation in the broader market remains highly elevated and the regulator has sent a clear message regarding the froth in the segment.

Therefore, investors have time, even now, to switch from small caps to fairly valued large caps and partly to fixed-income products. At this stage in the market, safety should be given priority over return,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The index has already added over 2 percent in March so far, giving negative returns in 2 of the 6 sessions of the current month so far. This comes after a 1 percent rise in February. Overall, in 2024 YTD, the index is up 2.5 percent; meanwhile, in the last 1 year, it has advanced over 23 percent.

From its birth in January 1986 with trading levels of about 550 points, to reaching its all-time high of over 74,000 points in 2024, the Sensex has managed to maintain its boom, despite having multiple periods of sharp decline like the 2008 financial crisis and the 2020 pandemic.

The first 1,000-point rise took Sensex 970 session and was hit in July 1990, over 4 years after starting. However, the next 1,000 points took only 270 sessions.

The 5,000 mark was hit by Sensex in October 1999, over 13 years after its start. The 10,000 mark took just 7 years after that with the Sensex hitting the level for the first time in February 2006. The same year, the Sensex crossed the 11,000, 12,000, and 13,000 levels as well by October.

The next year in 2007, the Sensex hit the 20,000 mark in December. It took the Sensex 109 sessions for this jump.

However, it took the index 3 years after that to gain the next 1,000 points, which was achieved in November 2010. This lag was on the back of the global financial crisis. Similarly, it took the Sensex almost 4 years to reach the 22k mark in March 2014.

2014 was a strong year for the index when it crossed multiple milestones and reached the 28,000 mark in November. The next 1,000 points took 50 sessions and was hit in January 2015 to reach the 29k level but then it took the index 225 sessions or over 2 years for the next 1,000 points. It hit its 30k mark in April 2017. In 2017, the Sensex again crossed multiple milestones to 34,000 levels in December 2017. It then took just 16 sessions to hit the 35,000 mark in January 2018.

The next 5,000 points took around 1.5 years and the 40k mark was hit in June 2019 before COVID. While a few months were disturbed due to the pandemic, the index hit the 45,000 mark in December 2020, rising strongly since November of that year.

The next 5,000 points took just 2 months and the 50,000 milestone was hit by Sensex on February 3, 2021. In 2021 only, the Sensex soared another 10,000 points to hit its 60,000 mark in September 2021.

However, its journey from 60k to 65k took a while. Over one and a half years and 438 sessions later, the Sensex hit 65k on July 3, 2023. However, in the same month, the index crossed 66k as well as its 67k mark.

After crossing the 67,000 level in July 2023, it took nearly 93 sessions or 4.6 months for the Sensex to cross the 68,000 points mark on December 4, 2023, but the next 1,000-point milestone came its way in just a day on December 5, 2023.

3 more milestones of 70k, 71k, and 72k levels were also hit in December 2023 on December 14, December 15, and December 27, respectively, of last year.

After a superb December, the index again hit a new high and the 73,000 mark for the first time on January 15, 2024, and finally the 74,000 mark on March 6, 2024.

  • It took 32.1 years for the index to climb the 35,000 points milestone, in Jan 2018. The next 35,000 points were added over the next 5.9 years (a rise of 100 percent).
  • Sensex Total Return Index, now stands at 113660 points or 1.53 times the price index, which was 1.06 times in 1999 and 1.43 times when Sensex crossed 35,000.
  • Sensex Total Returns Index, which includes Dividends as well, crossed 1,00,000 points for the first time on 14th July 2023, to close at 1,00,700 points.
  • Sensex CAGR as measured by Price Return Index for the past 20 years stood at 13.4 percent and by Total Return Index it was 15.1 percent, as of March 6, 2024.
  • BSE’s Total Market Capitalization was reported to be at ₹391.3 lakh crore, after hitting a new high of ₹394 lakh crore on March 2, 2024, just a bit short of the ₹400 lakh crore mark.
  • This was aided by the price appreciation of listed stocks alongside new issues and listings coming to the public. In the latest leg of the 1000 points rally, the overall market cap went up by around ₹15.3 lakh crore.
  • BSE’s Total Market Capitalisation crossed the prominent 300 lakh crore mark by day-end closing levels and reached ₹301.70 lakh crore on July 6, 2023.
  • Sensex Average EPS computed by the trailing 12M PE as of February 2024, stood at around ₹2,924, a 10.7 percent growth YoY, 14.2 percent CAGR over 2 years, an over 100 percent jump in 3 years, or 26.5 percent CAGR, with base year of Feb’21, when the world was just recovering from the China originated Covid-19 pandemic. EPS is estimated to be up 14.0 percent CAGR in 5 years and 9.1 percent CAGR in 10 years.

The brokerage noted that India was generally looked upon as a Bright spot among the major world economies bringing record foreign flows to equities, that helped markets scale higher. Going forward, it expects the markets to continue to track the valuation trajectory and earnings growth of Indian corporates for FY24 and the ensuing general election-related developments.

Source: Mint

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