Mount 13K – An Arduous Climb for Sensex
The Indian stock markets have reached a new all-time high, leaving behind the memories of the “May Mayhem”. A month-long bear grip during May-June this year had knocked down the key indices by about 30%. The crash had been triggered by concerns on higher interest rates following a trend of monetary tightening across the world led by US Federal Reserve, as also high oil prices. These concerns have since receded, as US Fed has ended a two-year streak of interest-rate hikes and oil prices have dropped over 20 percent from record highs. Overseas investors have flocked back to the world’s second fastest growing economy in a big way, as the economy promises sustained growth.
The benchmark sensitive index Sensex of Bombay stock Exchange ended at 12736 on Friday, convincingly surpassing the record close of 12,612 set on May 10. This marks a gain of 45 percent in 90 sessions since the index hit a low of 8800. On a weekly basis, the 30-share index recorded a gain of 2.9 percent, when the quarterly earnings season got off to a flying start with Infosys numbers. More fireworks are expected in coming weeks as more and more numbers pour in. Most of the frontline stocks are likely to report robust earnings growth.
India, the Asia's fourth largest economy, is expected to grow by over 8 percent for the fourth year in a row. The economy grew 8.9 percent in the quarter ended June 30. The Indian growth story is now being seen as much more sustainable than ever before. The growth in Indian economy is expected to be led by the themes of strong domestic demand, outsourcing and infrastructure.
The overseas investors are looking to benefit from the rapid growth and the great long-term story that they expect to unfold. They put a record amount of US$10.7 billion into the Indian market last year and this year's net purchases have been US$5.37 billion. Since June 14, they've bought local shares worth US$2.77 billion, surpassing the amount they sold during the slump. Domestic investors are also contributing to the market's gains in a significant way. Domestic funds remained buyers of stock during the slump, purchasing shares worth $1.12 billion from May 10 to June 14. Since the low in June their purchases have amounted to US$1.78 billion.
The Indian stock markets have reached a new all-time high, leaving behind the memories of the “May Mayhem”. A month-long bear grip during May-June this year had knocked down the key indices by about 30%. The crash had been triggered by concerns on higher interest rates following a trend of monetary tightening across the world led by US Federal Reserve, as also high oil prices. These concerns have since receded, as US Fed has ended a two-year streak of interest-rate hikes and oil prices have dropped over 20 percent from record highs. Overseas investors have flocked back to the world’s second fastest growing economy in a big way, as the economy promises sustained growth.
The benchmark sensitive index Sensex of Bombay stock Exchange ended at 12736 on Friday, convincingly surpassing the record close of 12,612 set on May 10. This marks a gain of 45 percent in 90 sessions since the index hit a low of 8800. On a weekly basis, the 30-share index recorded a gain of 2.9 percent, when the quarterly earnings season got off to a flying start with Infosys numbers. More fireworks are expected in coming weeks as more and more numbers pour in. Most of the frontline stocks are likely to report robust earnings growth.
India, the Asia's fourth largest economy, is expected to grow by over 8 percent for the fourth year in a row. The economy grew 8.9 percent in the quarter ended June 30. The Indian growth story is now being seen as much more sustainable than ever before. The growth in Indian economy is expected to be led by the themes of strong domestic demand, outsourcing and infrastructure.
The overseas investors are looking to benefit from the rapid growth and the great long-term story that they expect to unfold. They put a record amount of US$10.7 billion into the Indian market last year and this year's net purchases have been US$5.37 billion. Since June 14, they've bought local shares worth US$2.77 billion, surpassing the amount they sold during the slump. Domestic investors are also contributing to the market's gains in a significant way. Domestic funds remained buyers of stock during the slump, purchasing shares worth $1.12 billion from May 10 to June 14. Since the low in June their purchases have amounted to US$1.78 billion.
Incidentally, the bulls are calling the shots on bourses across the globe. From Dow Jones in US to FTSE, CAC, DAX in Europe and Nikkei, Hangseng, Sensex in Asia – it’s bright and sunny everywhere.
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