News

Published: December 12, 2023
Updated: December 12, 2023

Sensex Surges to Historic 70,000 Mark Amidst Bullish Momentum

On a remarkable Monday, the Sensex soared to an all-time high of 70,000, driven by robust foreign institutional inflows and reflecting the bullish momentum in the market. This milestone, achieved just 31 days after the Nifty 50 tested the 21,000-mark, signals a buoyant phase for India's equity markets.

Market Performance:

Both the Sensex and the Nifty closed slightly below their intraday highs, securing gains of over one-tenth of a per cent each at 69,928.53 and 20,997.10, respectively. Foreign portfolio investors (FPIs) played a significant role, purchasing shares worth a provisional ₹1,261.13 crore, while domestic institutional investors (DIIs) sold a net ₹1,032.92 crore.

Inflow Revival and Market Sentiment:

The resurgence in FPI inflows since the previous month, following a two-month hiatus, has significantly bolstered market sentiment. Key players like HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, and State Bank of India have led the market's upward trajectory.

Market Capitalization Surge:

BSE's market capitalization experienced a notable increase of $22.3 billion, reaching $4.21 trillion. This surge, based on the flat closing rupee rate of 83.39 to the dollar, underscores the positive impact of foreign institutional investments on the Indian market.

Investment Trends and Outlook:

FPIs have infused a combined ₹39,500 crore into the market through December, marking a stark contrast to the ₹39,316 crore worth of shares they sold in the preceding two months. This shift in trend, coupled with DIIs' net investments of ₹20,113 crore since November, showcases a dynamic investment landscape.

Expert Insights and Market Predictions:

Experts project a brief market breather following this milestone, anticipating a potential resumption of the upside momentum. Retail and high-net-worth investors have started hedging their share portfolios, while FPIs and DIIs have initiated cumulative long positions on indices like the Nifty and the Bank Nifty.

Option Sellers and Market Expectations:

Option sellers on BSE predict a 2% weekly range for the Sensex between 69,300 and 70,700, as indicated by the open interest at the 70,000-strike call and put options. This range reflects the market's current expectations and the amount of money flowing into the market.

Market Cap Milestones and Future Outlook:

The Indian equity market achieved a remarkable feat, adding $1 trillion in market cap in just 2.5 years, reaching the new height of $4 trillion. Market experts project India to become a $7-trillion economy by 2030, emphasizing the potential for further growth in market cap through increased valuation and new IPO listings.

Optimism fuels market growth:

The Sensex's historic climb to 70,000 underscores the resilience and optimism in India's equity markets. With positive economic indicators, political stability, and a growing economy, investors can look forward to favourable conditions in the coming years. The market's ability to absorb external shocks and maintain upward momentum positions India as a promising investment destination.