Diwali on Dalal Street: Sensex closes at record high
Record high: Sensex closes at all time high of 21,196.81 points; Chidambaram cautions investors against 'excessive exuberance', but spots green shoots of growth. Is positive mood sustainable?business Updated: Nov 02, 2013 01:15 IST
In pre-Diwali cheer, the Sensex hit its third straight record closing high at 21,196.81 points on Friday amid continued foreign fund buying and renewed optimism about the economy.
In intra-day trade, the benchmark index of Indian stock markets had surged to an all-time high of 21,293.88, surpassing the previous record of 21,206.77 reached on January 10, 2008.
Bank and auto stocks were at the forefront, with State Bank of India, Mahindra & Mahindra, ICICI Bank and Tata Motors taking the Sensex higher. Realty and metal sectors too advanced.
The US Federal Reserve's decision this week to continue with its bond-buying stimulus programme eased concerns about foreign funds pulling out capital from emerging markets. The Sensex has been propelled by foreign inflows of around $3.5 billion (Rs 21,609 crore) since.
Union finance minister P Chidambaram said, "The markets seem to be happy, but I would caution investors against excessive exuberance."
Chidambaram, however, hinted that the worst for the economy, which was reeling two months ago when the rupee hit record lows, may be over.
"Core sector growth... strong monsoon and healthy exports augur well for economic growth. There are still many challenges, most important being inflation and reviving investment. But I think there will be green shoots even in investment.”
Chidambaram said he was confident India's current account deficit - the gap between dollar inflows and outflows and the broadest measure of trade - could be contained at $60 billion (Rs 3.7 lakh crore) this fiscal, from an earlier figure of $70 billion.
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