By Administrator_ India
The Sensex on Wednesday closed above the 50,000 mark for the first time as the Budget-fueled rally continued for the third straight session. The index rose 458 points, or about 1 per cent, to finish at 50,256, gaining close to 9 per cent in the last three trading sessions.
Investor wealth has jumped by Rs 12.31 trillion since the Budget day, taking the market capitalisation of all BSE-listed companies to a record Rs 198.43 trillion.
In the Union Budget for 2021-22, presented on Monday, Finance Minister Nirmala Sitharaman unveiled a spending plan to revive the economy, triggering the latest bout of optimism. The Street has cheered the announcements around asset monetisation, privatisation, and capex spends while maintaining the status quo on taxes.
The 50-share Nifty index gained 142 points, or 0.97 per cent, to end at 14,790 — less than 1.5 per cent short of the 15,000 mark.
These milestones looked improbable in March last year, when the Sensex had plunged to 25,981 and the Nifty dropped to 7,610 during the peak of the Covid-19 sell-off.
The two indices have surged over 93 per cent each from the March lows, supported mainly by foreign inflows and optimism around a sharp recovery in the economy and corporate earnings. The Sensex now trades at 22x its estimated earnings for FY23, much higher than the long-term average of 16x. Some believe the valuations will normalise as earnings are expected to rise sharply.
Analysts said the sharp increase in capital expenditure and impetus to investment activities would boost earnings for companies operating in this space. Also, the monetary easing in the western world and weak dollar will continue to act as key tailwinds.