BSE Sensex at 75,000: Analysing Historical Milestones
From being launched on January 1, 1986, the BSE Sensex indicates the performance of 30 stocks and stands as a crucial tool to measure India’s financial health. During its launch, Sensex had a base value of 100.
On December 11, 2023, BSE Sensex finally achieved a remarkable victory by crossing the 70,000 points mark in the Indian stock market. This came out as a historic moment for long-term investors in the market.
As of April 30th, 2024, the BSE Sensex share price stands at 74,439.21 points, comprising 30 companies with notable weightage in each sector.
To grasp the reasons behind this surge, let’s go back in time and explore India’s financial timeline.
Harshad Mehta Scam of 1992
As the scam unfolded before the nation, it shook the Sensex leading to a major 34% dip from December 1992 and July 1993. Within just a month of reaching its peak in Q1 of 1992, the Sensex fell by 2,000 points in June 1992. This drop caused panic among investors dropping the Sensex even further.
This is when SEBI – Securities and Exchange Board of India was formed in 1992 to regulate and keep the processes within the stock market transparent.
Global Financial Crisis – 2008
The Sensex reached 14,000 in 2006 but just 2 years later, it faced the Great Recession, leading to the worst financial crisis of 2008. The cause of this was a combination of suspicious activities, one of them being the availability of cheap credit.
This caused India’s stock market to face a decline, with the BSE Sensex going down from 20,000 points in January 2008 to just 9,000 points in October 2008.
Demonetisation- 2016
Narendra Modi’s historic move of demonetising two high-value notes, ?500 and ?1000, in November 2016, seriously impacted the Sensex dropping its intra-day returns by 1.23%. After this the Sensex also experienced a bearish trend between November 11 to November 21, causing its value to decrease by 6.6%.
Covid lockdown in 2020
When India implemented a nationwide lockdown to aid the COVID-19 pandemic, this did impact the stock market profoundly. The Sensex experienced a deep fall in a single day of 13%. The lockdown also resulted in the Sensex falling from over 41,000 to around 27,000 points by early April 2020.
Post Covid Recovery- 2021-2022
After COVID-19, Sensex showed remarkable recovery. On January 21, 2021, it opened at 50,096.57 points and within 8 months on September 23, 2022, it crossed 60,000 points. This rapid gain of 10,000 points was associated largely with the widespread distribution of COVID-19 vaccines and the digitization of India.
All-time high in 2023
In 2023, the BSE Sensex rose around 20%, marking 2023 its second-best year after 2017. It emerged as one of the top-performing stock indexes worldwide. Despite global tensions such as the conflicts in Ukraine and West Asia, 2023 proved to be a sturdy year for the Indian markets.
Conclusion
The BSE Sensex companies are spread over sectors from steel, FMCG, and banks to telecommunication services. The way India has overcome the above setbacks is a key indicator of its economic strength and global competitiveness. To invest in BSE stocks, open an account with Dhan.
