India's Sensex hits 9000

Usually we avoid repeating the same kind of topic in our successive postings. But the run that Indian stock market is having over the last few years is worth all the attention of US investors. Yesterday India' benchmark Sensex index crossed the magical figure of the 9000 mark and touched a life-time peak of 9000.32 points at mid-session on frantic buying spree by Foreign Institutional Investors (what Indians love to call FIIs) and Indian institutional and individual investors. FIIs continued to remain the major buyers on hopes that the India’s economic condition and the corporate fundamentals would continue to be strong.

For our readers who are not so much aware of the Indian market, here we present a short introduction to Sensex and a timeline of its spectacular achievements. The benchmark index of Indian stock market, Sensex was first compiled in 1986, is a 'Market Capitalisation-Weighted' Index of 30 component stocks representing a sample of large and financially sound companies: ACC, Bajaj, Bharti, BHEL, Cipla, Dr Reddy's, GACL, Grasim, HDFC, HDFC Bank, Hero Honda, Hindalco, HLL, ICICI Bank, Infosys, ITC, L&T, Maruti, NTPC, ONGC, Ranbaxy, Reliance, Reliance Energy, Satyam, SBI, Tata Motors, Tata Power, TCS, Tisco and Wipro.

Here is the timeline of its landmark achievements:
1000 (July 25 1990): Touched the magical four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results.
2000 (January 15, 1992): Crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr Manmohan Singh.
3000 (February 29, 1992): Surged past the 3000 mark in the wake of the market-friendly Budget announced by the then Finance Minister and current Prime Minister Dr Manmohan Singh.
4000 (March 30, 1992): Went past the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that a major financial scam hit the markets and Sensex witnessed unabated selling.
5000 (October 8, 1999): It took 7 years for Sensex to repair the damage from the scam before it crossed the 5,000-mark after the BJP-led coalition won the majority in the 13th Lok Sabha election (BJP is now the major opposition party) .
6000 (February 11, 2000): The infotech boom took the Sensex past the 6,000-mark and hit and all time high of 6,006.
7000 (June 20, 2005): News of the settlement between the Ambani brothers (Heirs of Reliance Industries) boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital and IPCL made huge gains.
8000 (8th September, 2005): More and More interest from foreign investors and Sensex crossed 8000 mark on brisk buying by foreign and domestic funds in early trading.
9000 (28th November, 2005): You know by now why.

We feel India has lot to give to US investors in years to come. The advantages of India are manifold: (i) Good democracy and free press and media, (ii) Thriving middle class which is embracing consumerism, (iii) English-educated knowledgable workforce, (iv) Existence of mature financial and regulatory institutions, (v) The urge among Indian youth to show to the rest of the world that they really matter.