BackSensex has multiplied investors' wealth 560 times since inception. Know its key milestones
BSE Sensex's journey has been quite eventful and interesting in the history of India's securities market
PremiumSensex today hit the 56,000 milestone in early deals as the Indian benchmark index continued the bull run, while consistently surprising by setting new record levels since the past few sessions. Since its inception, with 1978-79 as the base year, the bellwether index has rewarded the long-term investors handsomely.
"It is interesting to note that the Sensex has multiplied 560 times since its inception with 1979 as the base year (Base Year:1978-79 =100). By averaging around 15% CAGR during the last 42 years, Sensex has rewarded long-term investors handsomely. However, the journey of the market has been volatile with sharp ups and downs unnerving the short-term investors and traders. The future would be no different,'' said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
BSE, the first ever stock exchange in Asia established in 1875 and the first in the country to be granted permanent recognition under the Securities Contract Regulation Act, 1956, has had an interesting rise. The journey of BSE is as eventful and interesting as the history of India's securities market.
India's first equity index launched closed above the four-digit figure of 1000 for the first time on 25th July 1990. Many economic and political events pushed the levels of the benchmark index to several milestones - from surpassing 5,000 in 1999, closing above 10,000 in February 2006.. to hitting 50,000 in January this year and crossing the crucial 56,000 mark today.
Analysts said that the present bull run primarily driven by the new retail investors is in an overbought, richly valued zone. Metal index has been the outperformer this year followed by the Nifty IT Index. "But it is important to remember that even sectors with good earnings visibility, like IT and metals, are highly valued. Therefore, even while remaining invested in this bull market, investors have to be cautious while committing fresh funds," Vijayakumar added.
First-time investors turned up to the stock markets amid the covid pandemic with the number of retail investor account surging nearly 35% in the financial year ended March to reach 55 million.
Vijay Bhambwani of Equitymaster said that the retail buying is continuing to push headline indices higher into blue sky zone (new highs). "Since no bull is losing money at current levels there is little chance of profit taking emerging. That is adding to the buying confidence. The weekly expiry of index options is triggering a short squeeze (bears being forced to cover short sales). These confluencing factors are leading markets higher," Bhambwani added.
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