Continuing its bull run for the fourth straight month, the benchmark index Sensex hit its important psychological mark of 67,000 for the first time on July 18, 2023. It then extended gains for 3 consecutive days to hit its latest peak of 67,619.17 on July 20.
In this latest rally, Sensex has surged already over 22 percent till date from its 52-week low of ₹55,158, hit on July 27, 2022. This has been driven by unfettered FPI (foreign portfolio investor) flows into Indian equities, improving macroeconomic conditions, rising growth and the end of India's rate hike cycle, which started in January last year. However, now valuations seem to have become a concern for the investors.
"India is the largest recipient of FPI flows YTD among emerging markets. The sale in China continues. In July, till the 21st FPIs have invested ₹43,804 crore in India. This figure includes investment through stock exchanges, primary markets and bulk deals. FPIs continue to invest in financials, automobiles, capital goods, realty and FMCG. FPI buying in these sectors has contributed hugely to the surge in prices of stocks in these sectors and the Sensex and Nifty scaling record highs. The concern, however, is the rising valuations. At high valuations some negative triggers can lead to sharp correction," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Going forward, market valuations would be decided based on the outcome of earnings growth and the growth visibility across sectors, stated experts.
In a recent note, Sriram BKR, Senior Investment Strategist at Geojit Financial Services has shared some key highlights of Sensex's journey to the important 67,000 levels. Let's take a look.
- While the rally between 63,000 to 64,000 milestone took about 144 sessions or 7.1 months, the latest 3,000 points to 67,000 occurred in just 13 sessions.
- The latest 7,000-point surge from 60,000 took place in 450 sessions or 22.1 months.
- It took 31.3 years for the Index to climb to the first 30,000 points milestone in April 2017. The next 30,000 points took only 4.4 years.
- BSE's total market capitalization crossed the prominent 300 lakh crore mark earlier this month.
- BSE's total market capitalization jumped by over ₹6 lakh crore in just 3 sessions, during which Sensex moved from 66,000 to 67,000 levels.
- Sensex total return index, stood 1.54 times the price index, which was 1.06 times in 1999 and 1.41 times when Sensex crossed 30000.
- Sensex average EPS computed by the trailing 12M PE as of June 23, stood at around ₹2,706, a 10 percent growth YoY, 29 percent CAGR over 2 years and 20 percent CAGR in 3 years.
- In terms of investment growth, ₹1,00,000 invested in June-2003 would be worth around ₹24 lakhs as of 30-Jun-23 in total return index terms.