India’s own Sensex has had a great start to the new year, with the 30-share BSE benchmark stock index emerging as a global winner thus far. It has outperformed most leading global indices in the period from Jan 1 to Feb 6, surging 15% (2252 points) — while running neck-and-neck with the indices of Germany and Brazil.
It has outpaced the Dow Jones Industrial Average of the US, the Footsie (FTSE 100) of the UK, Hong Kong’s Hang Seng and France’s CAC 40, besides the Shanghai Composite and Japan’s Nikkei (see table).
But counting January alone, the Sensex topped them all, rising by 11%.
The catch is that Sensex was caught in a volatile whirlpool in 2011, losing 25% as local inflation concerns and an interest rate crunch hurt the index already troubled by the euro zone debt crisis.
“The Indian stock market became attractive for foreign investors as valuations became cheap after a significant fall in 2011,” said Motilal Oswal, chairman and MD, Motilal Oswal Financial Services.
Experts see stability ahead.
“The market is now in a stabilising mode. Going forward it will be a stock and sector specific rally and not an overall (bull) run,” said Oswal.Rahul Arora, CEO, institutional equities at brokerage Nirmal Bang, said the budget, inflation signals and the outcome of the eurozone crisis will decide the market’s course.