Business Standard

Sensex 20000!

EQUITY BOOM

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SI Team Mumbai
Weights(%)

Indian Oil and Gas

6.57

Reliance Universal

6.17

Tata Thermal Power

6.02

ABB

5.34

HLL Global

5.15

Infosys Technologies

4.91

e-chaupal Ltd

4.76

Trent-Pantaloon

4.74

State Bank of India

4.73

GlaxoSmithKline

4.02

Reliance Sanchar Nigam

4.01

HDFC Bank

3.62

Dr India Labs

3.59

Suzuki Motors India

3.45

BPO Corporation

3.36

IBM Disc

3.15

Bajaj Kawasaki

3.12

Taj-Oberoi

3.12

Tata Honeywell

2.38

Singapore Telecom

2.12

I Max Entertainment

2.04

Electrolux

2.01

Wipro

1.92

McDonald's Corp (India)

1.81

Star ABZee

1.68

Sterlite

1.62

TVS Auto Componants

1.52

Tata Steel

1.51

Birla Cement
1.07

Tata Motors

0.49

 The bull rally in Indian equities began in 2003 when the Sensex nearly doubled from sub-3000 levels. After a pullback to around 4,500 in 2004, the Sensex has had a secular bull run for the past 10 years with two intermittent corrections.  In dollar terms, the Sensex has posted a return of 20.86 per cent on an annualised basis, thanks to the appreciation in the Indian currency.  The rupee, which was trading at Rs 45 to the US dollar in 2003, has seen its value appreciate about 3.51 per cent per annual during the period, even as the currency was made fully convertible in mid-2006, and replaced by the pan-South Asian currency Rupa in 2012. Rupa currently trades at Rs 30.11 to the dollar.  With a larger free float and full capital account convertibility, India's weight in the Morgan Stanley Capital International Emerging Markets Free Index has grown steadily over the years and is now the third largest at 9.53 per cent.  The two emerging markets which continue to be bigger than India are South Africa and China. Brazil comes a close fourth with a weightage of 9.12 per cent.  South Korea, Taiwan, Mexico and Malaysia trail behind India. In terms of GDP, India rates among the fastest growing economies in the world with a real growth rate of 8 per cent plus since 2005. Inflation has hovered around 4 per cent.  The dramatic shift in India's position in the global markets has been possible primarily on account of big moves by the government over the past decade in the area of infrastructure, divestment of public sector behemoths, and low real interest rates.  Most importantly, the political stability in the region, thanks to improving trade relations with neighbour Pakistan, has made foreign investors look at India favourably.  The supply of equity paper has been enormous. Foreign inflows into Indian stock markets have also grown so much that it led to a liquidity driven bubble in 2009, which eventually blew out in the following year triggered by Janus

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First Published: Dec 29 2003 | 12:00 AM IST

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