01 December, 2020

Heat Wave On The Bourses

The recent surge in the BSE Sensex has more to do with the world than with India

Heat Wave On The Bourses

CORPORATE performance is down. The country is politically as shaky as it was a week, a month, a year ago. An industrial slowdown looms large over the economy. No new large projects are coming up. And yet, the Sensex soared as if there was no tomorrow. Between June 20 and July 2, the Bombay Stock Exchange Sensitive Index (Sensex) rose 6.1 per cent, breaching the 4300-mark. That's a 15 per cent rise over the last 12 months, and 40 per cent over the last five years. On July 1, the Sensex hit a 52-week high, and the next day, went even further to close at 4334.

The rise of the Sensex has been mainly powered by millions of dollars pouring in from foreign institutional investors (FIIs). And just six months ago, it was these FIIs who seemed to have lost faith in Indian stocks—some were even reportedly considering closing down their India operations. Surely things haven't changed that much since then to so dramatically change the direction of the flow of "hot money"—investor funds moving round the planet looking for good money-making...



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