Sensex sees third fastest 5,000-point gain in history to reach 80,000 mark

Sensex hits 80,000 levels today: Sensex hit the 80,000 mark in intraday deals on Wednesday, propelled by HDFC Bank stock that surged 4 per cent to Rs 1794 levels. This is the third fastest 5,000-point intraday rise for the Sensex in history. The index took just 57 days to gain the last 5,000-points - from the 75,000 mark to 80,000 levels on an intraday basis, shows data.

The fastest 5,000-point rally for the Sensex was nearly three years ago (September 24, 2021) when the index hit an intraday high of 60,333 in a span of just 28 trading days, rising from the 55,000 mark. On the other hand, it took 4,357 trading days for the Sensex to hit the 5,000 mark for the first time ever, shows data. (See table)

 

Winners and laggards

The last 5,000-point gain in the Sensex – from 75,000 mark hit on April 9, 2024 till July 3, 2024 – has been led by a diverse set of stocks. Mahindra & Mahindra (M&M) has been the top gainer that surged over 37 per cent during this period to around Rs 2900 levels, ACE Equity data shows. 

Ultratech Cement, Bharti Airtel, Power Grid Corporation of India (PGCIL), Tech Mahindra and Axis Bank were some of the other gainers.

On the other hand, IndusInd Bank, Titan Company, Bajaj Finserv, Maruti Suzuki, Sun Pharma, Larsen & Toubro (L&T) and HCL Technologies were some of the laggards during this period that slipped up to 8 per cent, data shows.

The markets, said Milind Muchhala, executive director at Julius Baer India, have been steadily making new highs, as the realisation started sinking in post the slightly unexpected election outcome that the overall focus of the government on the existing reforms related to domestic manufacturing, infrastructure development, etc. is likely to continue. 

The economic environment, he believes, remains on a sound footing, and so does the overall corporate earnings momentum, which is also supporting the buoyancy. In the event of a global risk-on environment, triggered by increasing expectations of rate cuts could lead to increasing flows to EM equities, with India expected to emerge as one of the bigger beneficiaries of the flows.

“Domestic liquidity continues to remain strong. Some money sitting on the sidelines also seems to be getting committed post the big event. We are also seeing a couple of index heavyweights across sectors – financials, consumer staples, telecom, information technology (IT) – doing some catch up rally. The overall outlook continues to be constructive, although we could see some phases of consolidation in the markets as the earnings catch up with the valuations, which are at slight premium to the historical averages,” he said.

The road ahead

In the short-term, however, markets are likely to take cues from the upcoming earnings season and the budget back home, analysts said.

The government, they feel , is unlikely to be too populist in its policies. Despite the election disappointment, analysts at Nomura, for instance, expect fiscal prudence. Low core inflation and high real rates, they feel, should support an easing cycle from October.

"Despite the unexpected electoral outcome for the incumbent, we do not expect a pivot to populism. Instead, a continued focus on capex and fiscal consolidation is likely, including in the upcoming July budget. The RBI’s large forex reserves buffer should also help minimise external spillovers, with stability boding well for capital inflows and the economy," wrote Sonal Varma, chief economist for India and Asia ex-Japan at Nomura in a recent co-authored note.

Analysts at Motilal Oswal Securities, too, believe that while tax estimates may not change in the upcoming budget in July, record-high RBI dividends could help the government to spend an additional amount of about Rs 1.1 trillion this year [versus budget estimates], while reducing the fiscal deficit target to 5 per cent of GDP in FY25.