Sensex tops 50k for first time; Nifty above 14700

India’s benchmark S&P BSE Sensex hit the 50,000-mark for the first time ever following a rise in global peers. The Sensex opened at 50,096.57, up 304.45 points or 0.6%. The Nifty was at 14,712.90, up 68.20 points or 0.47%. The measure has logged 11 straight weeks of gains after touching successive new highs. The rise in the index has been fueled by foreign buying, with overseas investors pouring $2.6 billion into Indian equities in January after record net purchases last quarter. Prospects of a bounce-back in earnings after the economy reopened following coronavirus-triggered lockdowns have spurred investor confidence. Still, India’s central bank has cautioned of a widening ‘disconnect’ between ‘certain sections of the financial markets and the real economy.’

The markets are said to be reacting to the strong cues coming from global markets with Joe Biden being sworn in as the President of the United States.

Reliance Industries, Bajaj Finance, ICICI Bank and Axis Bank together accounted for more than 250 points to the gain in Sensex.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said “The smooth transition in the US and President Biden’s healing speech lifted the US markets to record highs. This feel-good factor is likely to spread to other markets too. FII inflows which had declined a bit during the last few days, have again turned strong going above 2200 crore on Wednesday.”

“Apart from robust FII inflows, another major factor supporting the rally is the impressive corporate results which started in Q2 and continue in Q3…The rally in stock markets, which is global, has been triggered by the massive liquidity injection by the central banks. This ultra-loose monetary policy of massive liquidity injection and historically low-interest rates is the response to the severe recession caused by the pandemic. While enjoying this bull run, investors should not be carried away by the euphoria. At high levels, markets are vulnerable to corrections,” he added.

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