Kochi ∙ The stock price index BSE Sensex is at an all-time high. The National Stock Exchange index Nifty has touched a 52-week high, just below its all-time high. It is special that the stock market in India has been able to achieve a huge advance while various central banks have continuously increased interest rates to curb inflation and speculations that the US and Europe are heading for recession have created panic in the world markets.
The market was on the path of improvement for a few days as the foreign financial institutions resumed buying shares from here on the assumption that India is more or less safe and the country’s retail investors got hope again. Yesterday, reports that the Federal Reserve, the central bank in the US, will adopt a slow policy in raising interest rates suddenly raised the Sensex to a record high.
At one stage yesterday, the Sensex rose 900 points to 62,412.33 but ‘closed’ with an increase of 762.10 points at 62,272.68. The Nifty ‘closed’ at 18,484.10 levels, though it rose as high as 18,529.70 points. With the Sensex reaching a record, the total asset value of stock investors in the country rose to Rs 283.9 lakh crore. 2.46 lakh crore rupees in the value of investors’ assets yesterday alone. The market expects that not only the US Fed Reserve but also central banks including the Reserve Bank of India may slow down in raising interest rates. Apart from this, other important factors that have helped the Indian market are:
∙ Advances in other stock markets in Asia. Japan’s Nikkei rose 0.95 percent, while South Korea’s Kospi rose 0.96 percent.
∙ First signs of improvement in European markets.
∙ Decline in crude oil prices in the international market. Brent crude futures fell 0.3 percent to US$85.13.
∙ The appreciation of the rupee against the dollar. The exchange rate improved to Rs 81.63. The previous day’s rate was 81.84.
∙ ‘Short covering’ done by stock traders to settle liabilities taking into account the expiry of derivatives in the current month.