The Sensex may be back at 20,000 but we're very far from recovering the animal spirits that were up the first time. Somehow, hitting a round number is less and less exciting when it's not the first time.
The Sensex has crossed 20,000 for the third time, at least if you count crossings in the upward direction, those being the ones that cause any excitement.
There was a time when the arrival of each round number of the Sensex would result in giant headlines and added euphoria. With each passing round number, the elation became less marked.
There's an arithmetic justification to this. The move from 2,000 to 3,000 was a 50% gain, but from 9,000 to 10,000 just 10% and from 19,000 to 20,000 just 5%, equivalent to gains made from 2,850 to 3,000. The next round number that anyone should actually show any excitement about is probably 30,000. And that's probably a fair way off.
Still, the focus on round numbers does detract from the fact that the one single number of an index doesn't even begin to capture everything that has happened to investors and their investments.
For one, it's not the same index any more - especially in terms of the weightages. Investors who were heavily invested in realty or infrastructure or telecom are very far from gaining there 20,000 back.
In sharp contrast, financial services and some technology leaders are well on the way to their 30 or even 40,000. And of course, the foreigners are nowhere near a recovery too. In US dollar terms, the Sensex is around 15,000 for them.
The biggest difference from the index's first visit to 20,000 is the utter absence of the huge number of excited retail investors. Despite whatever recovery or gains people's investments may have made, the animal spirits are not back, something that's hardly surprising.
In terms of where the investing Indian thought the economy, the markets and his investments were going, it all seems a very distant dream.