You are here: Home » Markets » News
Business Standard

Indices extend post-Budget bull run; D-Street's ascent to mount 50,000

The index has given annualized return of 11.5 per cent in the last two decades. We compare the index in 1999, with how it looks at present

Topics
Markets Sensex Nifty | Budget 2021 | Dalal Street

Samie Modak & Sameer Mulgaonkar  |  Mumbai 

Sign board of the Dalal Street- Financial capital of India
Sign board of the Dalal Street

The Sensex on Wednesday closed above the 50,000-mark for the first time. On two previous occasions, the index had crossed the landmark intra-day, but had failed to sustain the gains.

Sensex is a free-float market cap weighted index that tracks the performance of India’s largest 30 firms. The base value for the index was taken as 100 and base year as 1979. The widely tracked index closed above the 5,000-mark for the first time in 1999. The index has given annualized return of 11.5 per cent in the last two decades. We compare the index in 1999, with how it looks at present.

Back then, the m-cap of all BSE-listed firms was just Rs 7 trillion. Today we have three companies — (Reliance, TCS and HDFC Bank) — with individual m-cap exceeding Rs 7 trillion. While the index has risen 10x since October 1999, the overall m-cap has grown 28x. The trailing 12-month price-to-earnings (P/E) multiple for the index back then was 21x. Today it is a highest-ever 34.2x.

chart

India’s market capitalisation was more distributed in 1999, with Sensex companies accounting for just 39 per cent of overall market cap. Today, they account for nearly half of India’s market cap. Also, the sectoral distribution more even compared to now, where financial stocks dominate.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, February 03 2021. 23:25 IST
RECOMMENDED FOR YOU
.