Will Sensex touch the coveted 1,00,000 mark early next year? Experts weigh in

Of late, the Indian markets have been scaling fresh heights, with Sensex recently inching past the 85k mark. While the BSE Sensex is trading at 85,571.85 points, can the benchmark index cross the 6-figure, 1,00,000 mark in early 2025?

As data suggests, foreign investors have poured Rs 57,359 crore into Indian equities in September 2024, making it the highest inflow in nine months, surpassing the Rs 1 lakh crore mark in 2024. This figure was the highest since December 2023, when FPIs had invested Rs 66,135 crore in equities.

While this was mainly driven by a 50-bps rate cut by the US Federal Reserve this month, which significantly boosting the liquidity in Indian markets, the domestic markets also continue to remain resilient, steered by a strong line-up of mainboard and SME (small and medium enterprises) IPOs and strong confidence of domestic investors.

However, RBI's decisions in the months to come, particularly regarding inflation management and liquidity, will be key in sustaining this growth, noted Robin Arya, Smallcase Manager and founder & CEO of research analyst firm GoalFi.

Nevertheless, the markets have been on a roll, with data indicating that the Sensex has given returns worth 850x to investors in the last 45 years, making for a CAGR (compounded annual growth rate) of 16%. This simply means that if you had invested Rs 5,000 in the market in 1979, since the index's inception, you would have a staggering Rs 39 lakh to your name today, all thanks to Sensex.

In just the past year, Sensex has delivered returns worth 30.62%. Despite the ongoing, sturdy momentum, many experts think it is unlikely that Sensex will breach the 1L mark anytime soon next year. Most experts anticipate that Sensex will comfortably hit this milestone within the next 2 years, i.e. by 2026. Some market analysts also believe it possible for Sensex to achieve the 1,00,000 mark by Diwali 2025, or end of next year.

Says Anand K Rathi, co-founder of MIRA Money, "It seems unlikely that the Sensex will reach the 1 lakh mark early next year. We anticipate a growth of 6 to 8%, or at best 10%, in Sensex values until the end of FY25 in March 2025.
However, unexpected factors could always come into play. One potential trigger could be an EPS growth exceeding the estimated 10%, possibly reaching 11% or 12%, as per Bloomberg. This could lead to the market touching 90,000, with the Sensex surpassing 90,000 by March next year".

Rathi notes that while he sees Sensex reaching 1 lakh by the end of next year is possible, but we do not
anticipate it happening before March 2025.

Trivesh D, COO, Tradejini highlights that while the Sensex reaching the 1L mark is certainly on the horizon, the timing remains uncertain.

"We are still seeing strong bull market growth, with the Sensex on an upward trajectory, despite some minor corrections along the way. However, the major correction we expect hasn’t happened yet, and that’s something investors should keep in mind", he says.

"One key factor in this will be the impact of upcoming IPOs which will be an overhang for the short term as huge funds will be diverted to these issues. Investors will certainly take profits out of existing investments, leading to short term reduction in supply into the secondary markets. However, over the long term, the Sensex is poised for growth, and barring any major disruptions, it will continue its upward trajectory. Long-term investors should focus on these broader trends while staying mindful of short-term volatility", continues D.

However, reaching the 6 digit mark is just a number, which can happen sooner than later. Nevertheless, whenever the index hits that mark, it is going to be a milestone achievement for both the Indian stock markets and the broader economy.