Sensex, the 30-stock benchmark of the BSE, is on a verge of history, as it is just a shade away from the historic 50,000-mark.
The index is now just 42 basis points away from the 50,000, and gaining 208 points in the benchmark will create history.
Interestingly, if Sensex crosses the 50,000 in the next 23 days, it will make yet another record: its fastest 10,000 summit. Previously, Sensex had made the journey from 10,000 to 20,000 in the 2007 stock market rally in just 633 days. The index breached the 40,000-mark 610 days ago.
In its journey of 42 years, during which the benchmark index saw many additions and subtractions, it has managed to give compounded annual returns just shy of 15.5 per cent.
"Clearly, equities as an asset class has exceeded returns from all other asset classes over the last four decades and the journey highlights the importance of equities as an essential component of all investor portfolios. We are at the cusp of a new economy cycle and business uptrend in India. The pillars of the long term equity rally are in place, i.e., low interest rates, bank balance sheets on a mend, significant policy reforms along with the recent focus on attracting foreign investments and developing the Indian manufacturing sector," says Gaurav Dua, Sr Vice President, Head Capital Market Strategy and Investments, Sharekhan by BNP Paribas.
But despite this, the connection between the real economy seems to be lost: between April 2020 till now, the equity markets have rallied like never before at a time when the economy has tanked.
| The Sensex Story | |
| Journey | Number of days |
| 100-10,000 | 7,507 |
| 10,000-20,000 | 633 |
| 20,000-30,000 | 2,680 |
| 30,000-40,000 | 1,541 |