INDIA. Delhi: The dream run by bulls on the Indian Stock Exchange continued unabated today as the 30–share BSE index, Sensex breached the 50,000 points mark in early morning trades for the first time in history. Global equity benchmarks also surged on global cues as markets posted gains after US President-elect Joe Biden’s inauguration amid expectations of fresh stimulus by the incoming administration.
Wall Street greeted The US President by climbing higher on Wednesday, closing at record highs amid promises of big economic stimulus and relief. All the three major indices DowJones, Nasdaq, and S&P 500 celebrated with all-time highs after Biden was inaugurated as the 46th President of the United States in a peaceful ceremony.
The Asian markets also rose amid hopes that new US President Joe Biden will take steps to fix the battered economy.
After gaining the last 5,000 points in just 32 trading sessions, Sensex on Thursday rallied over 300 points in the opening session. Sensex was trading at 50,132, up by 340 (0.68%) points at the time of writing this report.
Besides the change of guard in the US, the success of COVID-19 Vaccines also is the reason for the surge. But at the same time, experts were cautious in their approach as at this level of 50K, the valuations in the market are overstretched and with earnings not coming through remain the key risk.
Also Read: Joe Biden Says USA President Trump ‘Offered Nothing But Failure And Delusions From Start To Finish’
Top reasons for the rally
Inauguration of US President ship
The market is optimistic the US President Joe Biden’s administration will mean more support for the struggling US economy, setting off a recovery that’s crucial for the export-driven Asian region. Biden on his first day of Presidency showed what is his topmost agenda by rejoining the US to the Paris climate act, WHO, and also revoking the travel act.
Strong corpoate earnigs
Strong Corporate earnings by TATA Consulting Services (TCS), Infosys, Wipro, HCL Technologies, etc. are also fuelling the Bull Run.
Budget 2021 expectations
Budget 2021 investor sentiments also remained positive amid hopes of bold economic reforms in the upcoming Union Budget 2021-2022. Finance minister Nirmala Sitharman will present this year’s budget on 1 February 2021 and it is hoped that the upcoming Budget could potentially lay the foundation for a long term economic growth path.
Foreign Fund inflows
The rallies in the market ensuring the last few months have been backed by strong foreign fund inflow. Easy liquidity conditions across the globe have also helped India’s market, as FIIs’ have invested heavily in the past few months.
(With inputs from IANS)
