By Jason Simpkins
India's benchmark stock index yesterday eclipsed the 19,000 level, the first time that's happened, The Associated Press reported.
The Bombay Stock Exchange's 30-share Sensex peaked at 19,059, a 639.6 point gain and a new all-time high. The Sensex has soared by 1,000 points in just five trading sessions, similar to the leap it made last month when the index roared from 16,000 to 17,000.
On the National Stock Exchange, the 50-company Standard & Poor's Nifty index jumped 242 points, or 4.5%. Foreign institutional investors have fueled India's market surge with cash inflows totaling $16.5 billion to date, nearly double the amount invested in all of last year. Foreign investment in October alone has roared past the $4 billion mark.
Indian indexes got a boost from blue chip stocks such as Tata Steel, a subsidiary of the larger Tata Sons, and Reliance Energy Ltd. Tata Steel was up 7.5% at Monday's close, but Reliance was the day's big winner soaring 12.9%.
Reliance Industries is the largest petrochemical company in India's private sector. The stock's dramatic surge came one day after it had announced it would be breaking $28 billion out of its war chest to press forward with foreign acquisitions. According to the Financial Times, Reliance Chairman Mukesh Ambani detailed the plans at the company's annual meeting.
A renewed focus on foreign acquisitions and open-mindedness towards partnerships "will give Reliance the ability to pursue both organic and inorganic growth opportunities of significant scale and size," Ambani said.
It is not yet known specifically what types of acquisitions Reliance will target, but many analysts expect the company to make a strong move into Western markets. Reliance is already building what will be the world's largest refinery complex in the Indian city of Jamnagar. And, according to Ambani, the company will be investing $4 billion in oil and gas exploration "in the coming years."
Mukesh Ambani is on his way to becoming the richest man in India, as he possesses a 47% stake in Reliance, estimated to be worth $50 billion.
News and Related Story Links:
The [Indian] Financial Express:
2007 FII inflows hit $16 billion.