The sensex hit a new lifetime high above the 47k mark on 18th December 2020 at 47,026 points, and closed a tad below the milestone at 46,961 — still 70 points up from its previous close. The gain came even as the economy lagged behind with the previous quarter GDP growth rate at a negative 7.5%, shrinking exports and retail inflation at close to 7%, which is much above the RBI’s target level of 6%. The Nifty on the NSE too closed at a new high of 13,761 points.
Market analysts said that a global liquidity deluge at zero interest rate, the easing of Covid infections and the rollout of the vaccine are the main factors behind the worldwide rally, which is also helping the Indian market. In addition, the resilience of the domestic economy despite one of the world’s strictest lockdowns between March and May is prompting foreign funds to infuse money into the market at record speed, which is pushing indices higher, the analysts added.
The record rally is also making investors richer. At the close, BSE’s market capitalisation was at Rs.185.3 lakh crore, up from its late March low of Rs.100 lakh crore.
Data shows that after net outflows of nearly Rs.69,000 crore in March and April together, foreign funds have net infused over Rs.2 lakh crore into Indian stocks, of which Rs.1 lakh crore came since November. As a result, the sensex rose 18.5% during the same period.
According to NSE chief economist Tirthankar Patnaik, the Indian economy is showing signs of a recovery, with growth in the current quarter likely to be back above zero.