India’s Sensex Exceeds 20,000 on Record Investment
India’s Sensitive Index topped 20,000 for the first time, buoyed by record inflows from U.S. and European investors that have caused the benchmark to double in less than two years. The stock market has risen about 39 percent since it became the third emerging market after China and Russia to surpass $1 trillion in May, helped by the fastest economic growth in 60 years and a strengthening currency.
“Liquidity has played an important role in this rally,” said Chakri Lokapriya, who manages $850 million of stocks in India, Brazil, Russia and China at BNP Paribas Asset Management U.K. Ltd. in London. “Investors have reduced exposure to western markets and as a result increased flows to emerging economies like India and China.”
Investors based outside India bought a record $17 billion of equities this year, according to the Securities and Exchange Board of India, the nation’s regulator.
The Bombay Stock Exchange’s Sensex index gained as much as 4.1 percent to 20,024.87 as the world’s second-fastest pace of economic growth lifted profits at Larsen & Toubro Ltd. and Maruti Suzuki India Ltd. The index closed 3.8 percent, or 734.5 points higher, at 19,977.67 at 3:30 p.m. local time.
The Sensex had its biggest advance in 6 1/2 years last week after the regulator allowed more funds to buy stocks. The index took eight days to recover from a one-minute almost 10 percent slump on Oct. 17 triggered by proposed curbs on overseas buying.