July 18, 2023, witnessed a momentous occasion as the benchmark index Sensex surged to an impressive psychological milestone of 67,000, extending its bull run for the fourth consecutive month. The astounding rally, gaining over 22 percent from its 52-week low, was fueled by robust FPI flows, bolstering macroeconomic conditions, surging growth, and the conclusion of India’s rate hike cycle. However, as valuations become a growing concern for investors, experts assess market prospects based on earnings growth and sectoral visibility.
Delving into Sensex’s remarkable journey, Sriram BKR, Senior Investment Strategist at Geojit Financial Services, shares 8 key highlights leading to the coveted 67,000 level:
- The recent surge of 3,000 points to 67,000 materialized in a remarkable 13 sessions, contrasting with the previous rally from 63,000 to 64,000, which took 144 sessions or 7.1 months.
- Further bolstering the rally, the index witnessed a noteworthy 7,000-point surge from 60,000, spanning across 450 sessions or 22.1 months.
- Sensex’s trajectory to the first 30,000 points milestone was a 31.3-year journey that commenced in April 2017, whereas the subsequent 30,000 points were achieved in merely 4.4 years.
- Celebrating another significant achievement, BSE’s total market capitalization crossed the notable 300 lakh crore mark earlier this month.
- Evidencing the index’s dynamic performance, BSE’s total market capitalization surged by over ₹6 lakh crore in just 3 sessions, coinciding with Sensex’s climb from 66,000 to 67,000 levels.
- The Sensex total return index stands at an impressive 1.54 times the price index, indicating substantial growth compared to 1.06 times in 1999 and 1.41 times during the crossing of the 30,000-point milestone.
- Reflecting a positive earnings trend, Sensex average EPS computed by the trailing 12M PE as of June 23 hovered around ₹2,706, representing a 10 percent YoY growth, 29 percent CAGR over 2 years, and 20 percent CAGR in 3 years.
- Illustrating the power of investments, ₹1,00,000 invested in June-2003 appreciated to approximately ₹24 lakhs as of 30-Jun-23 in total return index terms.
As Sensex continues its momentous journey, market participants remain watchful of potential shifts in valuations and strive to seize opportunities amid the dynamic landscape of the financial markets.