Financial Daily from THE HINDU group of publications
Saturday, Dec 31, 2005
Financial Daily from THE HINDU group of publications Saturday, Dec 31, 2005 |
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Markets
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Stock Markets For Sensex, real peak is still 1992 after adjusting for inflation Sudhanshu Ranade
Chennai , Dec. 30 THE Sensex increased from 6,000 to 7,000, shot up to 8,000 and then went on to race past 9,000 over the past few months. But time does not stand still. In real terms, the value of fifty lakh rupees in 1994 was equal to almost a crore of rupees in 2005. To get an idea of the real gain in the Sensex, it needs to be adjusted for inflation. Once this is done, it turns out that the real all-time high was attained as far back as April 2, 1992, when the value of the inflation-adjusted Sensex was 4,983, as against its then nominal value of 4,547. The value of the price index at that time was 91.25 (base 1993/94=100). That level remained unsurpassed even when the Sensex closed at the `all-time high' of 9,394 on December 19, 2005, because of the increase in prices over the past 14 years or so. To breach the all-time high of 1992, the Sensex would have needed to cross 9,637 by December-end, when the price index is expected to touch 193.4. The deadline has been missed.
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