The Sensex breached 50,000 for the first time ever, riding on the momentum of the last few months and the hope that Covid-19 vaccination and stimulus measures will help the economy rebound quicker than expected.
After tumbling to a low of 25,638 on March 24, the 30-stock gauge has nearly doubled. Of 207 sessions in more than 10 months, the index fell in 73.
The Sensex was launched on Jan. 2, 1986, with the base year of 1978-79 and a base value of 100. The first print had companies like Hindalco Industries Ltd., ITC Ltd., Mahindra & Mahindra Ltd., Reliance Industries Ltd., Tata Steel Ltd., Nestle India Ltd. that are still part of the index. Others such as ACC Ltd., Crompton Greaves Consumer Electricals Ltd., Glaxosmithkline Pharmaceuticals Ltd., Grasim Industries Ltd., and Bombay Dyeing and Manufacturing Co. are no longer in the benchmark.
The gauge witnessed periods of extreme volatility, including the Harshad Mehta scam in 1992 to the dotcom bubble at the turn of the millennium and the global financial crisis of 2008-09. The new millennium also brought unprecedented bull runs in the mid-2000s and in 2014.
Doubling In Five Years
The index hit 25,000 for the first time in June 2014 after the Bharatiya Janata Party secured a majority in the general election. It had closed at 25,019 on June 5, 2014.
Since then, the top 10 gainers on the index by percentage have been two consumer goods makers, one oil & gas conglomerate, two IT companies, two private banks and a non-bank lender, a drugmaker and an automaker each.
- Note: In the chart above, Asian Paints has been part of the Sensex since December 2015, while Dr. Reddy's was excluded from the index in December 2020. Their respective returns have been calculated from the time they were included and were part of the index.
By points, more than 54% of the overall gains since June 5, 2014 have come from three stocks — Reliance Industries Ltd., HDFC Bank Ltd. and Infosys Ltd.
- Note: Kotak Mahindra Bank became part of the Sensex in June 2017. The contribution has been calculated since then.
The Final Flourish
The Sensex closed above 40,000 for the first time on June 3, 2019 — a week after Prime Minister Narendra Modi secured a second term in office with a larger majority than five years ago.
The list of gainers this time, however, is different.
Asian Paints Ltd. and Infosys Ltd. top the charts since then, gaining nearly twofold. Other technology stocks such as HCL Technologies Ltd., Tata Consultancy Services Ltd., and the Bajaj twins also contributed to the rally.
The Sensex then rose to another record of 42,273 on Jan. 20, 2020, before witnessing the worst selloff in more than a decade triggered by the Covid-19 pandemic. Within two months, the index had shaved off 15,000 points as investors flocked to safer havens and equities across the globe tumbled.
But fiscal and monetary stimulus announced by the government and the central bank prompted a one-way rebound in the equities. That was fuelled by sustained foreign inflows and hopes of a potential Covid-19 vaccine.
The Sensex reclaimed 40,000 on Oct. 8, 2020. And since then, it has gained 23%, led by Larsen & Toubro Ltd., State Bank of India Ltd. and Tata Steel Ltd.
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