India\’s main stock index, the Sensex, has hit a record high, propelled by an increased inflow of foreign capital.
The index reached 21,293.88 early on Friday, surpassing its previous high of 21,206 set during the stock market boom of 2008, before closing at 21,196.81.
The rise marks a remarkable turn around from two months earlier, when foreign investors were pulling out money from the country amid worries over growth.
However, some analysts doubted whether the current rally was sustainable.
\”I am not too pleased with the way fundamentals are shaping up,\” said Phani Sekhar, a fund manager of portfolio management services at Angel Broking.
He added that the rally was being driven by only a handful of stocks \”which are hopelessly expensive despite fundamentals\”.
\”The liquidity rush is making people accumulate stocks. If fundamentals don\’t improve or liquidity tapers, then this rally won\’t have many legs,\” he said.
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