Last updated: 21 Jan, 2021 | 07:07 am
Fastest 5,000-point rally
The Sensex has breached the 50,000 mark for the first time ever, helped by the fastest 5,000 point rally in its history. The journey from 45,000 to 50,000 was completed in 48 days beating the previous 115-day rally from 15,000 to 20,000. The table below shows how much time Sensex has taken to breach various milestones since the index touched the 5,000-mark for the first time ever in February 2006.
What’s driving the rally?
What to expect going forward?
This is a liquidity driven rally. While the markets are soaring higher and higher, valuations are getting even more expensive. The economy is yet to recover from the impact of the pandemic. According to estimates, Nifty is trading at a very heavy premium of more than 15% to its long-period average. These levels are clearly unsustainable in the long-run, while the gush of liquidity and along with low-interest rates could continue to take the indices higher in the near-term.
The focus would now be on the Union Budget. If the government announces any new levy of fresh taxes or surcharges, it could dampen the spirits in the market. Apart from this, lower-than-expected earnings, geopolitical risks and overhang of Covid-19 also pose risks to the market.