Monday, Oct 03, 2022
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Stockmarket

A Li'L Elevator Music

The Sensex spurts as a peaking Dow prompts FIIs to plump for Indian commodity scrips

A Li'L Elevator Music
A Li'L Elevator Music
outlookindia.com
-0001-11-30T00:00:00+05:53

The irony is striking: when the country had a valid government, the bourses were struggling to trot. And now when the government is a mere caretaker, the stockmarkets are flying like Pegasus. In the one month since the Jayalalitha quake rocked the Vajpayee government, the Bombay Stock Exchange Sensitive Index (Sensex) has jumped almost 25 per cent, a gain of nearly 1,000 points. Says Singapore-based Sameer Arora, in charge of Asian emerging markets at Alliance Capital: 'In a way, it's good that there is no government. In fact, if there were a government, I don't think the market would have taken off like this. Each evening, the markets would have debated what's going to happen at the Centre. Now till the elections, everyone's sure nothing much is going to happen.' Adds K.R. Bharat, managing-director, Credit Suisse First Boston (India) Securities, 'India's biggest enemy is India itself. Whenever things are on an even track, the country finds something to pull itself back. Indeed, absence of a valid government at the Centre is the best news for the markets in a long while.'

In the past couple of months, half-a-billion dollars have come into the Indian bourses. Not even in '96, when the fii inflows were a record $3.05 billion, did the markets witness this kind of a bull run. The other interesting aspect is that while FIIs have made money on this rally, local operators have been caught napping. Previously, local operators would warehouse stocks and ramp up prices well ahead of the foreign funds, who would be compelled to buy at a higher price. The local brokers didn't count on the sustainability of the rally this time.

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