Sensex surges 5,000 points in 80 days, turbo charged by FPI and domestic flows

Sensex’s 5,000-point journey to 75,000 took just 80 days, fuelled by a mix of foreign and domestic institutional flows. Though the last 5,000-point rally would have been one of the fastest in Sensex’s history, index moves of older periods based on points may not be strictly comparable with the latest changes because of the differences in the statistical impact of the base effect.

The Sensex took 27 years to breach the 10,000-mark for the first time in February 2006, while it gained the next 10,000 points in just 22 months as a flood of fresh foreign flows drove stock prices higher at a faster pace. The progress from 20,000 to 30,000 was marked by significant volatility and challenges, spanning over a decade.

The subsequent rise from 30,000 to 40,000 unfolded smoothly within two years with the index reaching 50,000 in under two years amid the global pandemic. In terms of valuations, the Sensex is currently trading at 25 times its trailing 12-month earnings, compared to 28 times when the index stood at 40,000 and 34 times at the 50,000 level.