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Indian stock market breaches 5,000-mark after 42 months
Tuesday, 04 November 2003, 20:30 IST
MUMBAI: India's booming stock market crossed another milestone Monday, with the benchmark share index in the intra-day trade rising past the magical figure of 5,000-mark, a level not seen in three-and-a-half years.
At 2.30 p.m., the stock market barometer 30-share Bombay Stock Exchange sensitive index or Sensex was quoting at 5,046.91, representing a gain of 140.04 points or 2.85 percent over its previous session's close.
Analysts say the crossing of the crucial 5,000-mark comes as a major boost for investors who had badly burnt their fingers in the last few years dormant domestic stock market.
"The market was expected to go past the 5,000 level by end of the next month but it managed to achieve that target much earlier due to large-scale buying by investors," said Neeraj Deewan, an analyst with Quantum Securities.
"The crossing of the 5,000 mark clearly shows the faith of the domestic as well as international investors on the fundamentals of the Indian market. It's a great thing to happen to the market after a long time," Deewan told IANS.
The seemingly never-ending rally on the bourses has already helped the key share market index to register a gain of nearly 50 percent since the beginning of the current calendar year.
The market index has also gained over 72 percent since it touched a six-month low on April 25, making it one of the best performers in the Asian region.
Indian stocks had remained dormant since the dotcom bust around three years ago. A flood of accusations of shady dealing and stock price manipulation had also kept the investors away from the market.
A slowing economic growth, gloomy industrial performance, and uncertain geopolitical situation inflicted more pains on bruised investors.
According to analysts, the positive factors that are fuelling the market rally include sharp increase in foreign fund inflows in the market, a smart pick up in industrial growth, and a downward trend in the overall interest rate regime.
The prospects of sharply higher economic growth in the current fiscal year boosted by normal monsoon rains has also enthused share investors.
The Reserve Bank of India (RBI), the country's central bank, Monday said the Indian economy would grow between 6.5 and seven percent in the current fiscal year helped by a sharp increase in farm output.
Indian economy grew by a moderate 4.3 percent in the year ended March 31, 2003, mainly due to a 3.1 percent fall in agriculture produce, as the worst drought in three decades ravaged large parts of the country.
A surge in investments by foreign funds, which act as the backbone for India's liquidity starved capital market, has also helped the rally in the market.
Foreign institutional investors have pumped more than $4.5 billion into Indian stocks so far in 2003 compared to about $555 million in the whole of 2002.
This is the fourth time in almost one decade since India opened up to foreign investors that net foreign fund inflows have crossed the $2 billion mark.
"This year may see record foreign fund investments in the Indian market. They are buying shares across the board to cash in on rise in return on equity," said a broker with the Bombay Stock Exchange.
In the intra-day trade Monday, shares of Dr. Reddy's Laboratories rallied rose 13.5 percent to 
1,357 after the company said it had received final U.S. Federal Drug and Administration approval to sell an anti-hypertension drug.
Stocks of India's largest carmaker Maruti Udyog Ltd. advanced four percent to 336.10 after it said its vehicle sales in October jumped 35.2 percent to 38,715 units.
Source: IANS
1,357 after the company said it had received final U.S. Federal Drug and Administration approval to sell an anti-hypertension drug.
Stocks of India's largest carmaker Maruti Udyog Ltd. advanced four percent to 336.10 after it said its vehicle sales in October jumped 35.2 percent to 38,715 units.
Source: IANS