It took six years for Sensex to double, i.e. from 25,000 points to 50,000 points, when do you see it hitting 1 lakh points?
It is really a matter of perspective isn’t it? I can argue that the Sensex doubled from 26,674 on March 24, 2020 to over 50,000 today (intraday Jan 21, 2021) in all of just 10 months! And it will hit 100,000 points one day. I say that with conviction simply because the market value is a multiple of the aggregate earnings of all the companies that make up that particular index. If the earnings rise, at a reasonable price to earnings multiple 100k is only a number that will definitely be reached at some time. The only debate as I began at the start of the argument is the time taken, the multiple that it will require to achieve it. More importantly, I believe for investors to believe that a certain level in the market is sustainable, the market has to trade at near average valuations over a period of time. Otherwise, these targets are only worth the day they are achieved and the markets will remain volatile all along.
How are you feeling about Sensex reaching 50,000? What will change from here?
As mentioned before Sensex levels are only an indication of the current multiple the markets are trading future earnings at. The change from here will be reflected in the delivery of the expectations and the course of earnings growth the Sensex companies will take from here.
