Sensex cracks 15k finally

Market capitalisation now at $1.08 trillion.

The country's markets scaled yet another peak with the Sensex crossing the 15,000 mark intra-day on Friday, climbing 5,000 points in just 17 months as domestic and foreign investors increased purchases, attracted by India's record economic growth.

The BSE's 30-share sensitive index (Sensex) today rose to the day's high of 15,007.22, before closing at 14,964.12, up 102.23 points (0.69 per cent) from yesterday. It is now just 35.88 points away from 15,000. The broader NSE-50 Index rose 0.71 per cent, or 30.9 points, to post a new high of 4,384.85.

However, the 1,000-point journey from 14,000 to 15,000 took 146 days, the longest time taken in the last 5,000-point rally. This is because investors booked profits at every rise on the assumption that the market may be overvalued. 
 

FROM 14K TO 15K
	Jan 03, 2007	Jul 06, 2007	% change
Sensex Gainers
Larsen & Toubro	1476.20	2364.55	60.18
Bharti Airtel	640.50	866.40	35.27
BHEL	1150.77	1555.85	35.20
Reliance Ind	1284.80	1711.45	33.21
Tata Steel	471.60	623.15	32.14
Sensex Losers
Bajaj Auto	2842.65	2108.50	-25.83
Tata Motors	939.20	710.60	-24.34
Maruti Udyog	974.55	795.85	-18.34
Cipla	257.85	212.10	-17.74
Dr Reddy's Labs	808.50	672.50	-16.82

The price to earnings (P/E) ratio, a key indicator to judge the strength of the market, is now 21.29 for the 30 Sensex stocks, showing the market is slightly expensive. The P/E ratio was 18.64 on February 6 last year, when the market first crossed 10,000.

The journey also saw market capitalisation crossing the magical $1 trillion mark, on the back of mega share offerings by Cairn Energy, DLF and ICICI Bank.

Investments by foreign institutional investors in Indian stocks crossed $55 billion, with the last two-and-a-half years seeing them buying close to $24 billion worth shares on the Indian bourses. Market cap now stands at $1.08 trillion (Rs 43,37,439,99 crore).

The 1,000-point journey upwards was, however, not broadbased, with more stocks (1,390) declining than advancing (1,353) during the period.

Indian markets also trailed other global markets during the period it took to rise from 14,000 to 15,000.

China (up 41.33 per cent), South Korea (up 32.05 per cent), Thailand (up 26.26 per cent), Malaysia (up 22.98 per cent), Indonesia (up 21.38 per cent), Singapore (up 17.26 per cent), Taiwan (up 16.05 per cent), Hong Kong (up 10.38 per cent), the Nasdaq (up 9.64 per cent) and the Dow Jones (up 8.75 per cent) gave higher returns than India, which gave a modest 6.77 per cent gain in the period.

Experts are divided over the movement of the market from here. Some have concerns about the valuation of the Indian stock exchange, while others are more optimistic.

Citigroup has put India as the "most unattractive" destination in the Asia Pacific, saying Indian stocks are not only expensive but also losing momentum.

"India is losing the momentum support it has enjoyed over the past one year, with both long-term price momentum and earnings revision signals turning negative," Citigroup said in a note to clients this morning.

Morgan Stanley, on the other hand, is holding on to its target of the index reaching 50,000 by 2020, which it had forecast in February this year.

But everyone agrees that the Sensex rise from 10,000 to 15,000 points is also a tale of a remarkable comeback, after the sharp 30 per cent fall in the index in a matter of days in May 2006.

Many had thought this was the end of a three-year bull-run that began in 2003, when the index was just 3,390.

Capital goods, metal, oil and gas and banks have gained the most in the rally from 14,000 to 15,000 while infotech, fast-moving consumer goods and auto have been underperformers.