On Cloud Nine

Stock market scaled new highs in 2017 despite poor economic indicators and weak corporate earnings. But will the big bull run go on in 2018?

On December 18, investors got a rude shock as the S&P BSE Sensex plunged by over 800 points. The scare was fortunately short-lived, only for about an hour, as the benchmark index of the Bombay Stock Exchange (BSE) recovered soon to rally again. On that December day last year, the 30-share index of Asia's oldest stock exchange had swung whopping 1,200 points up and down before closing the day at 33,602 with a 139-point gain.

The brief, anxious moments on that day were triggered by the results of the legislative assembly elections of Gujarat and Himachal Pradesh. Market investors seemed to be rattled by the unexpected news of the Congress Party edging past the Bharatiya Janata Party (BJP) in Gujarat in the first hour of counting. The Sensex returned to the green as the trend soon reversed and the BJP was back in the lead, subsequently clinching both Gujarat and Himachal Pradesh.

Interestingly, such tense moments, like the one on December 18, have been few and far between for stock market investors in 2017. The year gone by has otherwise been quite rewarding, with the Sensex and the Nifty 50 - the benchmark index of the National Stock Exchange (NSE) - hitting multiple records.

From about 26,500 points at the beginning of the year, the Sensex has surged by 28 per cent to over 34,000 points in 2017. Similarly, Nifty 50, the broad-based index comprising 50 NSE-listed shares, has had a dream run in 2017, climbing swiftly by 29 per cent from a little over 8,100 points to well past the 10,500 mark. The combined market capitalisation (m-cap value of a stock or an index derived by multiplying total number of shares traded by their present market price) of all the listed shares on BSE and NSE has surged to over Rs 295,00,000 crore (BSE more than Rs 150,00,000 crore and NSE over Rs 145,00,000 crore).