the BSE’s Sensex seems to be breaking its own historic record every other week as India continues to boom…the market capitalization of the exchange has surged to US $500 Billion.
Does this continuous bull run reflect legitimate growth, or is it a bubble waiting to burst (a la KSE)? What are your thoughts?
**Indian stocks reach historic high **
BBC NEWS | South Asia | Indian stocks reach historic high
Shares at India’s benchmark Bombay Stock Exchange (BSE) have hit a record high on the back of falling oil prices and strong corporate performances.
**The Bombay sensitive index (Sensex) breached the 7,500 mark for the first time in its 130-year history. **
Gains were led by oil, gas and steel companies and the sensex closed the day at 7,505.60 points.
Stockbrokers say the boom is being spurred by foreign investors who are pumping money into the BSE.
The previous BSE high was 7,423.25 points which was set on Friday.
Trading volumes on the 30-share stock exchange reached 32.36bn rupees ($747m).
Some of India’s blue chip companies were the strongest performers, including the giant Reliance Industries Ltd, Tata Steel, ITC and auto-maker Maruti Udyog.
Oil deal
A dip in global oil prices on Monday meant that oil companies did exceptionally well including the state-owned Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation.
On Saturday, ONGC tied up with the world’s top steel producer, the Mittal Group, to seek oilfields, build refineries and lay pipelines abroad.
Two new companies, ONGC Mittal Energy Ltd and ONGC Mittal Energy Services Ltd, were launched as part of the deal.
The strong market performance has also come as a boost to India’s Congress-led coalition government, which is under pressure from its Communist allies to roll-back some of its economic reform plans.
Just over a year ago, when the party was voted to office, Indian share prices recorded their biggest ever fall in a single day’s trading after concerns that the new government would stall economic reforms.
“Black Monday” wiped billions of dollars off the value of India’s listed companies.
But India has continued to enjoy strong economic growth boosted by growing exports and further market reforms.