SENSEX @ 45000, will it touch the 50000 level next year? Giving these 11 factors together

Top to give returns after Corona summit

After the Corona crisis, the Indian market has been second in giving returns in the worldwide markets. Since the low of March, the Sensex has gained more than 77 percent so far. The way the economy is expected to recover, the data related to the economy is getting better. The earnings of companies are improving and the vaccine of COVID 19 is coming soon in the market, with its support, now the next target of SENSEX is seen to be 50 thousand.

SENSEX: Great journey so far

1000: July, 1990
5000: October, 1999
10,000: February 2006
15,000: July 2007
20,000: December 2007
25,000: May, 2014
30,000: March 2015
35,000: January, 2018
40,000: February 2020
45,000: December 2020

1. Record Investments of Foreign Investors

Foreign investors remain confident about the Indian market. In November, foreign investors invested Rs 62,951 crore in Indian markets. It also continues in December. Global investors see the possibility of higher profits in emerging markets like India. Due to this, the Indian market has reached an all-time high.

2. Economy’s Improved Outlook

The rating agencies’ estimate of GDP has been better than before. Rating agency Goldman Sachs says that the Indian economy will grow the fastest in the world in the next financial year. Goldman Sachs has now projected a minus 10.3 percent growth, improving India’s GDP estimate for FY2021. Rating agency Moody’s has also improved its GDP growth estimates for the second quarter of this financial year. According to rating agency Morgan Stanley, India’s GDP growth rate could reach 9.8 percent in the next year i.e. 2021. The Reserve Bank of India has said that the Indian economy is improving at a better pace than expected.

3. COVID-19 Vaccine

Pfizer and Serum Institute have sought approval for the emergency use of the Corona vaccine in India. At the same time, the central government has accelerated the preparation of vaccination in India. It is estimated that around 300 million people will be vaccinated by July 2021. There is a strong rally in the stock market due to the news of corona vaccine coming into the market. If the vaccine comes, the sentiment of investors will increase strongly.

4. Relief Package and Reform

In order to bring the country’s economy back on track and provide relief to the common man in the era of Corona epidemic, the government has continuously introduced relief packages. At the same time some reforms have also been done. Experts and rating agencies believe that the impact of these reforms is now visible and will have positive effects in the future.

5. Outside the primary market

In the year 2019, the IPO is going on in the market, which is expected to continue further. Due to the growing economy, many companies are in the line of getting IPOs. So far this year, companies have raised more than 25 thousand crores from the IPO. Which can increase further. This figure may be higher in 2021.

6. Interest rates at lower levels

The rate of interest remains constant. The RBI has forecast inflation in the coming months. This will help in reducing the interest rate. This will increase demand which will increase the profitability of companies.

7. Demand is increasing

Rural sentiments are strong this year due to better monsoon. Demand is increasing due to increase in rural income. New sales figures in the auto sector are also telling its story. It is expected to continue further. Increasing demand will improve companies’ earnings.

8. Improved earnings of companies

There has been a significant improvement in the earnings of companies in the second quarter of the current financial year. The commentary of management of most companies has also been encouraging. It is clear from the results of companies that the business of many is now coming to the pre-COVID level 19. In such a situation, in the third quarter, the corporate earnings can give a new height to the market.

9. Manufacturing

Growth has improved in the manufacturing activity of the country. At the same time, industrial production has also reached positive scope.

10. GST collection is increasing

Even in November, the GST collection has been more than Rs 1 lakh crore. In October too, the GST collection had crossed 1 lakh crore.

11. Increased deposit in bank

Indian deposits have increased amidst Corona crisis. Liquidity is also increasing in the market. At the same time, FDI has crossed a record 500 billion dollars.

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Earnings increased per share

In a recent report by Morgan Stanley, the Sensex could reach 50 thousand by December 2021. According to the report, in 2021, midcap and smallcap will be seen faster than Lorgecap. The brokerage has also raised earnings per share (EPS) estimates for the BSE Sensex to 15 per cent, 10 per cent and 9 per cent in FY21, FY22 and FY23. According to Morgan Stanley’s equity strategists Rhythm Desai and Sheela Rathi, the profits of companies will increase further and the market cap of the market will increase. The peak of COVID-19 infection has passed. Now high frequency growth indicators are looking strong. Government policy has been better, business activity is increasing in Indian companies. In this way, the possibility of better growth has been strengthened.

(Note: This information has been prepared keeping in mind discussions with experts, performance of BSE SENSEX, different brokerage reports and business activity.)