2007 can best be encapsulated as the Year of the Sensex -- the Bombay Stock Exchange's 30-share benchmark sensitive index -- crossed from 13,000 points to over 20,000 points during the watershed year.
While it took the Sensex 20 years to cross the first 10,000 points, it screamed past the 20,000 mark in just about 20 months. Marauding bulls scorned at weak global trends and the Indian markets continued to defy gravity in 2007.
And even as investors rejoice, no one quite knows what for certain is causing this dizzying rise of the Indian stock market. Experts produce predictable explanations: The fundamentals of the Indian economy are sound, foreign institutional investors are pumping in huge amounts of cash into the Indian stock market following huge returns from this emerging market, India is slowly opening up the economy further, the political climate is fairly stable... and even though the market has turned dicey for the small investor, with global oil prices hitting the $100 a barrel mark, some bullish experts believe the market may rise further.
With just too much money pouring into the bourses, investors are chasing high growth stocks, caring little whether or not the current market valuations are justifiable or sustainable.
It was, however, not a one-way movement for the Sensex: It experienced some extremely sharp falls too, wiping out many investors's savings. The apparent lack of any fear of a market bubble is testimony to the faith that Indians have in the economy today.
Image: A digital display flashes the news about the historic moment outside the Bombay Stock Exchange.
Text: Rediff Business Desk | Photograph: Indranil Mukherjee/AFP/Getty Images
Also read: The Sensex story: From 1K to 20K
Email this Page | Write to us