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Sensex hits Mach2, gains 894pts in one session

by laxman
November 16th, 2007

Fasten your seat belts. The stock markets are getting into a zone that is no longer for the weak hearted. On Wednesday, the Sensex gained 894 points in one set just 2odays ago when it gained 879 points. And it was only amonth ago that the index fell 717 points. Its second sharpest drop ever.

Just as Wednesday surge left investors richer by Rs 1.99 lakh crore. Last month drop has shaved off their wealth by Rs 1.45 lakh crore.
To the uninitiated. or for that matter, even to seasoned investors, these numbers may seem dizzying. As recently as in 2004, a 1,000 points annual increase on the index would be reason to celebrate.

On the one hand, everyone believes india will grow at 10% for the next couple of years. On the other, economists reckon the US will slow down and growth in europe will be flat. Juxtapose these variables with the investible surpluses available with oil rich countries and investing in India then becomes a no brainer. But a word of caution may be well inorder. In 1987, the jaspanese stock index Nikkei first touched 20,000 and rose to 39,000 two years later. Today. the Nikkei trades in the region of 15,000.

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