THE BOMBAY Stock Exchange Sensex has hit an all-time high, closing at 12,736.42 points on Friday. This is 124 points above its previous record of 12,612 points on May 10 this year.
The euphoria of May had faded all too soon. In a single month thereafter, the Sensex saw a steep fall by 29.2 per cent to close at 8,929 points on June 14.
Capital-market analysts are emphatic that unlike in May, the rally this time is backed by strong fundamentals. Dinesh Thakkar, CMD of Angel Broking, a broking firm, denied the present surge was just a 'Diwali Dhamaka'. "It's more like a Diwali bonanza for corporate India and equity investors," he said.
"The market is driven by fund flows, particularly inflows from foreign institutional investors (FIIs). Diwali means nothing to them. They are in it for a value game," said Thakkar. He said the Sensex might rise further by 800-1,000 points, backed by strong quarterly results.
Even as the July-September quarter results of many companies are proving better than what the market expected, the slide in oil prices in international markets is a signal that interest rates may soon stop rising globally.
Manish Kanchan, CEO of broking firm Ambit Capital, said, "Old timers in the market did not believe that Indian corporates could perform as well as they are doing. That held the Sensex back. The latest quarterly results have shown that corporate earnings continue to be of high quality."