Sensex Tops 50,000 First Time on Foreign Flows, Recovery Hopes

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India’s benchmark S&P BSE Sensex climbed above 50,000 points for the first time as foreign funds continue to buy local stocks amid hopes of a strong post-pandemic economic recovery.

The Sensex was up 0.5% at 50,062.00 as of 9:51 a.m. in Mumbai after rising as high as 50,126.73. The measure is set to gain for a 12th straight week, the longest winning streak since 2009. The Nifty 50 index was also up 0.5%, with investors seeking cues from the ongoing results season while awaiting the federal budget that will be presented on Feb. 1.

“This is the first quarter in which earnings are expected to rebound” since the pandemic, said Sanjay Sinha, a strategist at Citrus Advisors in Mumbai. “The ability of corporates and the government’s budget to meet expectations will be important to sustain the 50,000 level.”

Overseas investors have already poured a net $2.7 billion into Indian equities in January after record purchases last quarter. While prospects of a bounce back in earnings after the economy reopened following coronavirus-triggered lockdowns have driven the benchmark to record highs, some investors have flagged concern that stock prices have run ahead of themselves.

READ: Record Valuations Raise Alarm in Frenzied India Stock Market

India’s central bank chief this month cautioned of a widening “disconnect” between “certain sections of the financial markets and the real economy.” That came as the nation’s gross domestic product is forecast to shrink the most since the 1950s.

The yield on benchmark 10-year government bonds was little changed at 5.91% on Thursday, while the rupee strengthened 0.1% to 72.97 per dollar.

The Numbers

  • All but one of the 19 sector sub-indexes compiled by BSE Ltd. gained, with a gauge of energy stocks climbing the most
  • Twenty five of the 30 stocks on the Sensex rose
    • Reliance Industries Ltd. contributed most to the index’s gain, climbing more than 2%; Bajaj Finserv Ltd. was the biggest winner with a 3.5% jump

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