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Sensex Surpasses 85,000 for the First Time, Nifty Nears 26,000 Mark

During early trading on Tuesday, September 24th, the BSE Sensex surpassed 85,000 points for the first time ever. At that moment, the Nifty 50 was also up; it hovered around 26,000 points—aa good sign for India’s stock markets. Why the surge? Market watchers say investors are still riding high from last week’s big news: The U.S. Federal Reserve slashed interest rates. Stocks extended their gains after the opening bell. By late morning in Mumbai, the Sensex hit a new peak of 85,023 points.

The Nifty climbed to an all-time high of 25,971 points. Given this backdrop, one might expect traders to cash in some of their profits and move on. But that’s not what happened—at least not initially. A short while later trading figures showed both indexes still heading northwards. Sensex at 85,006.61 points (up 78.46 points or 0.092 percent) and Nifty on 25,964.25 (an increase of 25.20 points, or 0.097%).

This latest surge past the 85,000 mark comes just four days after the Sensex broke the 84,000 barrier—and only a few weeks since it breached 83,000 for the first time. Indeed, one must not forget that the journey from 80,000 levels only took about 12 weeks to complete—you could say equities have been on quite a roll!

Tata Steel, JSW Steel, and Powergrid were some of the top gainers in the Sensex group. However, Hindustan Unilever, Infosys, and Bajaj Finance didn’t do as well and saw declines instead. The BSE Metal index did rise by 2%. The oil and gas sectors each had gains of 0.5%, as did the power sector, but IT indexes went down also by 0.5%. Over on Nifty stocks with large increases included Tata Steel along with four others, while there were five major losers led by Hindustan Unilever and also including two other information technology stocks.

Dr. V K Vijayakumar is the Chief Investment Strategist at Geojit Financial Services. In a recent statement, he pointed out two important trends: worries about stability in West Asia. He especially mentioned how Israel has been bombing Lebanon—an action that has caused many deaths there.

Another worry for traders right now is that oil prices keep going up. Gold prices and something called “the volatility index” are becoming more volatile; this often happens when people are nervous. However, there may also be good news: overall stock markets have been doing well. So he suggested that people who are thinking of investing should take all these things into account before making any decisions.

As we near the end of the month and quarter, Ajay Bagga, a market expert, believes that there will be more volatility, particularly on Thursday when derivatives expire. An increase in gold buying and a stronger dollar suggests investors are worried about what is going on in West Asia geopolitically.

So even though they are cutting interest rates—something that often boosts stock prices—Indian markets may not climb by much. But don’t worry too much: analysts are still hopeful. Varun Aggarwal, Managing Director of Profit Idea, reckons there is still room for optimism even if markets have been reaching all-time highs.

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There are no tiredness or reversal signs yet!, he says. In a note to clients, Aggarwal points out how an old trader’s saying seems to fit the current mood on trading floors across Mumbai. Waves upon waves of constantly increasing value might well continue up until at least 26250, which would be another record level. According to him, this is known among technical analysts as maintaining higher lows as well as higher highs.”.