Proving India’s resilience and potential, Sensex breaches the 75,000-mark for the first time
The Indian stock market is booming, and how! Putting a big smile on the faces of investors, Sensex — India’s benchmark stock index — has unprecedentedly crossed the 75,000-points milestone. This surge is a testament to Indian economy’s robustness and investor confidence in it. The Sensex jump to new heights can be attributed to a confluence of factors. One, the economic recovery after the COVID-19 pandemic has instilled optimism among investors. With the relaxation of lockdown measures and the successful rollout of vaccination campaigns, economic activities regained momentum and fuelled investor confidence. Corporate earnings have also played a pivotal role in driving the market rally. Many companies across sectors have reported stellar financial performances, which has bolstered investor sentiment and contributed to the bullish momentum. Favourable global trends have also provided tailwinds to the Indian stock market. Positive developments in global markets, coupled with liquidity inflows from foreign institutional investors (FIIs), have amplified the buoyancy of Indian equities. With happy indicators in major economies and accommodative monetary policies by Central banks, investors have increasingly turned their attention towards emerging markets.
The proactive stance of the Government in implementing structural reforms and initiatives to stimulate economic growth has also been instrumental in driving investor confidence. Measures aimed at enhancing the ease of doing business, attracting foreign investment and revitalising key sectors such as infrastructure have been received well by market participants. Though it is a great achievement for Indian economy, it is not the only important thing. The policymakers must watch out for unemployment, rising inflation and rising numbers of MSMEs shutting down for one reason or the other. The Indian economy is still limping back to normal after the pandemic and any negative news could embolden bears, thus wiping off the gains overnight. It has happened in the past and it may happen in future. This perspective is not one of cynicism but of prudence. Investors have reaped substantial gains from the rally but they must exercise caution amidst heightened volatility. For corporates, favourable market conditions may present opportunities for fundraising and expansion. The buoyant stock market augurs well for the broader economy as it can spur consumption, attract foreign capital and stimulate economic activity. Looking ahead, market participants must remain attuned to evolving dynamics such as inflationary pressures, geopolitical tensions and other unforeseen eventualities. Policymakers must continue their efforts to address structural challenges and create an enabling environment for sustainable growth. Indeed, the historic breach of 75,000 points underscores the resilience of the Indian economy. As Sensex continues its ascent, it reaffirms India’s status as an attractive investment destination and underscores the collective endeavour to shape a brighter future for the nation’s economy.
