Record Rise in Stock Market: The stock market rose for the third consecutive day on Wednesday. Strong domestic economic data for July has pushed the market indices to record levels. For the first time, BSE Sensex crossed 54,400 and Nifty crossed 16,290.
Due to the record increase, the total market cap of the companies listed on BSE has increased from Rs 101.86 lakh crore as on 23 March 2020 to Rs 240.60 lakh crore on 4 August 2021. This figure is more than the total GDP of the country, which stood at Rs 194.81 lakh crore for 2020-21.
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Nifty up 16% so far in 2021
If we understand the growth of the market, then only in 2021, the Sensex has gained 6,519 points or 13.65% and the Nifty has gained 2,257 points or 16.14%. Apart from this, the mid cap and IT indices gained up to 30%. During this, the heavyweights of the market, ie big stocks, made a tremendous jump.
Heavyweight jump up to 62% in 2021
SBI has gained 62%, Infosys 31%, TCS 14%, Bajaj Finance 21% and Reliance Industries up 5.5%. In terms of market capitalization, their shares are included in the top-10 in the domestic market. Of these, the market cap of Reliance Industries is the highest at Rs 13.23 lakh crore.
Market doubled in Corona period
The market has increased rapidly after the initial decline in the Corona period. Sensex and Nifty have doubled from the lowest level of 23 March. Sensex touched 54,440 points, up 110% from 25,981. Similarly, Nifty also climbed 114% from 7160 to reach 16,290. Record Rise in Stock Market.
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Reasons for the rise in the stock market
- After the second wave of Corona, there was a recovery in the domestic economic data of July. In this, the GST collection increased by 33.14% on an annual basis to Rs 1.16 lakh crore, which for the first time in 9 months had increased to Rs 92,849 thousand crore in June.
- Manufacturing figures have also improved. IHS Markit’s manufacturing PMI has risen to 55.3, from below 50 in June. The unemployment rate fell to 6.95%, from 9.17% in June
- Corporate tax cut has increased the profits of the companies. As a result, listed companies posted excellent results in the first quarter (April-June) of FY 2021-22. In this, IT companies including Reliance Industries, Bharti Airtel, Bajaj Finance have made good profits.
- With no major IPO in the market at present, the cash flow in the market has increased. However, the number of IPO launches has not decreased. So far 25 new shares have been entered in the stock market in 2021. 4 IPOs are open on 4th August only. These include Devyani International, Windlass Biotech, Xaro Tiles and Krishna Diagnostics.
- The major reason for buying in the market is also due to foreign investors (FIIs). According to depository data, their total investment in the equity market so far in 2021 is Rs 44,990 crore. At the same time, an increasing number of domestic investors are also increasing their investment in the market. As of January 2021, the total number of demat account holders in the country stood at 5.15 crore.
Market experts’ opinion for investors
According to Chandan Tapadia, vice-president and derivatives analyst at brokerage house Motilal Oswal Financial Services, investors should stay invested as the market is going to continue to rise. Buying advice will be given on the shares of ICICI Bank, Bajaj Finance, Federal Bank and IRCTC. In these, an increase of 7 to 10% can be seen.
