Stock Market on Record High: The rally that started in the stock market since August continues to this day. In the business of 21 January, the Sensex has crossed the level of 50 thousand for the first time. With the low of March 2020, the Sensex has gained nearly 100 percent or close to 25000 points. During this time, the market cap of BSE listed companies has also reached 199 lakh crore. In 1.5 months, the index has gained about 5 thousand points. Now experts believe that this market valuation has become too much. There is no recovery in the economy like the market is booming. In such a situation, investors should now wait for a strong trigger. A single negative trigger can bring the market down. In the coming days, corporate earnings and important roles can play.
March’s increase in investors’ wealth by 95 lakh crores
Last year, the stock market came down to its lowest levels due to the Carona virus epidemic. The Sensor touched 25639 on March 24. At the same time, it crossed 50100 on 21 January 2021. During this time, the market cap of BSE Listed Companies increased by about 95 lakh crores. On March 24, 2020, the market cap was 10369706 crores which increased on 21 January 2021 to reach around 19882400 crores.
A high valuation can cause risk
Dr Joseph Thomas, Head of Research, MK Global Management, says that there have been many big reasons behind the strong rally in the stock market. The central bank has increased liquidity. Foreign investors are continuously pouring money into the market. At the same time, due to the arrival of Corona vaccine, the V shape recovery of the market as possible and the Sensex crossed 50 thousand in today’s business. The recent market changes in the US have given the market a new trigger. However, at the level of 50 thousand, the valuation is now more visible. If the companies’ earnings are not good then this valuation can become a risk for the market.
Samit Chavan, the Chief Analyst of Angel Broking, says that from here, investors are advised to remain stock-specific. Investors should identify the sectors in which the forecast is likely to continue ahead before investing money. Traders should keep an eye on the timeless exit.
What is the danger bell for the market?
According to a recent Bloomberg report, it was said that even after the economic slowdown, the high valuation of the stock market is a bell of danger. According to a Bloomberg report, Nilesh Shah, managing director of Kotak Mahindra Asset Management, says the equity market has gained support due to lower interest rates and increased liquidity. But further reverse direction can also be seen. At the same time, experts are also believing that a single negative trigger in the budget can weaken the market sentiment.