The domestic equity markets have been breaking and making newer record highs day after day following the corporate earnings optimism, capital infusion from DIIs and FIIs, stability in crude oil prices, relatively lower volatility, diminished trade war worries, strengthening of PSU banks, etc. The benchmark Sensex index breached the psychological level of 37,000 for the first time in the stock market history while the wider share indicator NSE Nifty 50 made a new all-time high on Thursday. BSE Sensex on Thursday surpassed 37,000-mark hitting an all-time high of 37,061.62 whereas NSE Nifty marked a fresh all-time high of 11,185.85.
Notably, it took about 13 long years for the S&P BSE Sensex to climb 37,000 from a level of 7,000. BSE Sensex hit the 7,000-mark on 20 June 2005 on settlement news of Ambani brothers. From 20 June 2005 to 26 July 2018, Sensex has gone through numerous headwinds, major ones include 2008 stock market crash, the slowdown in economic activity from early-2011 to mid-2012, Chinese meltdown in 2015, repercussions of Brexit in early-2016.
Other factors that decelerated the uptick in Indian stock market are after-effects of the global financial crisis and the recent of them include implementation of LTCG (Long-Term Capital Gain) tax on equity and equity oriented mutual funds, one after the other banking frauds with India’s second-largest PSU bank PNB witnessing a loss of Rs 14,000 crore (approx) involving the disbursal a fake LoUs by Nirav Modi and Mehul Choksi group companies, US-China trade war tussle, uncertainty over North Korea’s missile programs, global sell-off, etc.
Surprisingly, despite a long list of negative triggers, a blue-chip share has returned as much as 3400% in the last 13 years while BSE Sensex has amassed 30,000 points in the same time.
Shares of India’s third-largest bank by market capitalisation and fourth-largest private sector lender by asset size Kotak Mahindra Bank have been on a raging run since their stock market inception. The stock of Kotak Mahindra Bank has returned 3393% to Rs 1,309.60 from a share price level of Rs 37.49 (stock price is adjusted with corporate actions) on BSE. Kotak Mahindra Bank is well placed among India’s top 10 companies by market capitalisation or stock market value.
On the basis of today’s closing share price of Rs 1,309.6, Kotak Mahindra Bank commands a market capitalisation of Rs 2,49 lakh crore. Kotak Mahindra Bank shares have returned about 30% in CY2018 and have been one of the top performers among the components of BSE Sensex so far in this year. The stock of Kotak Mahindra Bank was included in BSE Sensex in June 2017.
Meanwhile, BSE Sensex touched an all-time high of 37,061.62 before closing 126.41 points higher at record closing high of 36,984.64 on Thursday, 26 July 2018. Shares of SBI, ICICI Bank, HDFC, HDFC Bank and Axis Bank were the top contributors in lifting the index to record high while Maruti Suzuki, Yes Bank, L&T, Infosys and TCS were the top laggards.