Monday, October 19, 2009

Sensex has great run in '09, but couldn't match 1992 Bolt


The spectacular rise of the benchmark 30-stock index, Sensex, that has more than doubled in the last six months, has left investors gasping breath but the index have seen through busier times. Back in 1992, it had taken just 39 trading sessions or less than two months for the Sensex to double in value after the then finance minister Manmohan Singh opened the economy to foreign investment.

The bellwether stock index had moved from 2,193 points on February 7, 1992 to 4,386 on April 8, as per an ETIG study, which analysed historical movement of Sensex over the last two-decades. This was days before the stock market scam by Harshad Mehta was exposed.

Expectations of better economic growth numbers and improving industrial production spiked stock market valuations since early March. The markets buoyancy is also due to huge money inflows from foreign institutional investors (FII) besides domestic investors returning to the stock market. The additional factor which is jacking up stock markets is the weakness of US dollar, which has touched 13 month low against the Indian rupee.

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