Return journey1 min read . Updated: 17 Sep 2009, 10:33 PM IST
India’s bellwether stock index, the Sensex, has doubled in value over the past six months, the fastest since the early 1990s. This was the second fastest growth among all major indices with the exception of Vietnam and was propelled by the rush of liquidity that coursed through markets around the world after an unprecedented stimulus push by governments and central banks. What also helped India’s case was the relative insulation of the economy from the credit and banking crisis, which meant that although economic growth dimmed it did not slip into recession. The unexpected and decisive victory of the United Progressive Alliance government only added to investor euphoria. With declining commodity prices boosting company earnings in the first quarter, both foreign and domestic investors bought heavily into Indian stocks.
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With the gauge trading at about 19 times estimated earnings for fiscal 2010, the next set of triggers that will determine the future direction of the index are September quarter earnings, inflation and interest rate movements.
Data compiled by Ashwin Ramarathinam/Mint
Graphics by Ahmed Raza Khan/Mint