Major Milestones: Sensex Journey from 100 to 38,000

Publish Date: August 29, 2018

The 30-share Bombay Stock Exchange sensitive index (BSE Sensex) has forever been the barometer of India’s growth since inception in 1979. When someone says ‘Sensex’, it is synonymous with the stock market in India.

At a record high of 38,000 these days, the barometer has traversed a path through many peaks and bottoms.

The index has been on a growth trajectory with hitting fresh lifetime highs on July 12 and trading above 36,500 mark. This was mainly due to positive earnings, reduced fiscal deficit targets and continued foreign portfolio investment (FPI) inflows. Recently, SENSEX crossed the 38,000 mark in August 2018.

Here are few interesting milestones from this journey of SENSEX.

MILESTONES: Sensex Journey

• Sensex at 1,000: The Sensex crossed the 1,000 mark for the first time in 11 years (since its launch) in 1990 on the back of good monsoon and upbeat corporate results.
• Sensex at 5,000: The sensitivity index of the BSE climbed to 5,000 mark in 1999 backed by the boom in the technology sector.
• Sensex at 10,000: Owing to a sharp run in commodity pricing, Sensex touched the 10,000 mark in 2006.
• Sensex at 20,000: On the back of the rise in investments from foreign institutional investors and aggressive retail buying, Sensex touched the 20,000 level for the first time in 2007.
• Sensex at 25,000: Post the subprime crisis in 2008-09, which negatively impacted the economy and the investor sentiment, the benchmark index bounced back to hit a new high of 25,000 in 2014 after the NDA formed a stable government.
• Sensex at 30,000: Sensex spurred to 30,000 backed by global liquidity provided by central banks of major economies.
• Sensex at 36,000: Sensex touched record high of 36,000 in January 2018 on the back of IMF’s prediction about India’s growth, which boosted the investor sentiment.
• Sensex at 38,000: Sensex crossed the 38,000 mark on August 2018 on account of India’s economic growth expectations.

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People are often misinformed that investing in the stock market is like gambling. This is not true. Surely, there can be a downside. For example, the SENSEX fell from 21,000 points to around 7,500 points between January and October 2008. A fall of nearly 13,000 points in 10 months. However, it regained all the lost points and crossed 25,000 in 2014.

One should not take stock market downsides as negative. These are the right chances of investment in well-performing equities. With all its ups and downs, in the long-run, market moves ahead.

In turbulent market conditions, it is possible that few of your stocks might experience a regular downward shift. In such cases, rupee-cost averaging can help you make the best of the situation. A systematic investor with a disciplined approach will be able to generate much higher returns by investing in the stock market.

ALSO READ: 6 things to know about Rupee-Cost Averaging

For first-time investors, starting with a small corpus, Exchange Traded Funds (ETF) are a good choice as they are easy to invest and sell. ETFs have low costs as they follow a passive investment style with low turnover. A first-time investor can understand the fundamentals of ETF easily. Thus, it may be a good choice for a new investor to get acquainted with the stock market.

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Also read:

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• How interest rates affect equity markets
• Forward-looking statements and stock markets: How are they related
• Understanding Stock Market Trends & their Types