BSE Sensex: From 1,000 to 50,000 in 30 years
The Indian stock market benchmark, the BSE Sensex, on Thursday scaled 50,000 points for the first time in history as the gauge extended its longest weekly winning streak in over a decade. The Sensex has nearly doubled from its lows in March and has risen nearly 50 times in three decades — the benchmark was on 999 on January 1, 1991. A look at how the markets have reacted to the key landmarks in the last 30 years
July 1991: Dr Manmohan Singh’s liberal budget
In the wake of a balance of payments crisis and double-digit inflation, on 24 July 1991, Manmohan Singh announced measures to liberalise the Indian economy in his budget. This budget will always be remembered as the one that changed India forever. In the next two months, Sensex rallied 29% (from 1,488 to 1,916 pts), ending the year just shy of the 2,000-mark.
April 1992: Harshad Mehta Scam
The post-economic liberalisation era witnessed one of the most notorious scams which shook the Indian financial system and what is now commonly known as the Harshad Mehta scam or the securities scam. It involved a fraud of around ₹4,000 crore, which led to a massive crash in the Indian stock market. The scam first became apparent in late April 1992, and sent the Sensex from 4,546 points at the start of April to 2595 points by the first week of August – a drop of 43%
October 1999: Sensex crosses 5,000 points
The Indian markets crossed the 5,000-point mark in October 1999 as the National Democratic Alliance won the 13th Lok Sabha elections and formed a stable government under Atal Bihari Vajpayee. A technology boom ensured that the Sensex rose by 63% till the end of 1999 since the beginning of the year
2008: Global financial crisis
The global financial crisis resulting in recession in major developed countries caused the Sensex to fall by over 50% during 2008-2009. From around 21,000 levels seen in the beginning of 2008, the index crashed to near 8,000 till March 2009. Markets tumbled as foreign investors, who took a big hit back home due to the financial crisis (recession), needed their money and subsequently pulled back their investments from India. The index saw its biggest fall since 1992 on 24, October 2008.
2009: UPA wins second term
The Sensex saw its biggest inter-day gain on May 18, 2009 in a buoyant reaction to the then ruling United Progressive Alliance (UPA) coalition’s decisive electoral win in the Lok Sabha elections. For the first time in Indian market’s history, trading was halted for the day due to markets hitting the upper circuit limit. The election results ignited hopes among investors for a stable government with less interference by regional parties that would push reforms to lift the slowing economy
2014: NDA wins with Narendra Modi as PM
India’s Sensex rose to a new record high of over 25,000 on the back of a landslide victory for the Narendra Modi-led Bharatiya Janata Party on 16 May, 2014 .The Lok Sabha elections, which resulted in the Bharatiya Janata Party getting a simple majority on its own as well as PM Modi’s pro-business image, caused the markets to rally by over 8% in May 2014.
2017: GST is implemented
The Goods and Services Tax (GST), India’s biggest tax reform, was launched on July 1,2017 replacing a slew of indirect taxes with a unified tax structure. After its implementation, the Sensex gained by over 10% till the end of the year.
2019: NDA wins second term
The Sensex crossed 40,000 points after NDA’s victory in the Lok Sabha election in 2019. Investors expected that with the NDA government winning a second term, there would be political stability and a majority government would be able to take decisions easily and carry on with reforms. The subsequent corporate tax cut announced in September 2019 ensured that markets remained on an upward trajectory as it hit new all-time highs in January 2020.
March 2020: Covid-19 triggers crash
Markets tumbled as investors remained worried about the uncertainty over the novel coronavirus disease outbreak and pulled out money from equity markets. The Sensex lost around 40% from its peak in mid-January 2020 till March 2020. The index saw its sharpest inter-day decline of 13.15% on March 23, 2020, a day before PM Narendra Modi declared a nationwide lockdown
Jan 2021: Vaccine rolled out in India
The Sensex breached its previous all-time high in November as global vaccine developers announced successful updates on their results and applied for emergency approvals in different countries. Boosted by vaccine hopes, liquidity expansion by central banks resulting in more foreign institutional investment and a clear outcome in the US presidential election, the Sensex has risen by 25% till date since November 2020.
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