MUMBAI: October 31, 2013
The 30-scrip BSE sensex closed at an all-time high of 21,034 points on the back of aggressive buying by foreign institutional investors (FIIs) with access to low-cost funds in the US. But the euphoria that normally accompanies such milestones was missing—and for good reason, because the real economy is anywhere but on a high. Economic growth is at 4.4% (for the quarter ended June), less than half the 9.2% it was at when the sensex was its previous peak of 21,005 in November 2010. It's not very different from the US situation, where Wall Street and 'Main Street' have diverged.
The record peak for the benchmark index comes at a time when several broking houses are either cutting salaries or shutting shop because retail investors, who have not made much money in the last five years, are staying away from Dalal Street.
This has been a narrow rally driven by a few select stocks that FIIs have favoured. Of the 30 sensex stocks, only 13 have returned double-digit gains since the last peak in 2010. In contrast, five stocks lost nearly 50% and 14 have given negative returns during the same period.
Source: The Times Of India
