Chart of the week: Indian stocks soar to record highs

Sensex index chart

India’s Sensex stock market index jumped almost 14% in the second quarter of 2014 – the top performer of the world’s 40 biggest stock markets. It was also its best quarterly showing in five years.

Investors have driven stocks to record heights on hopes of bold structural reforms boosting sluggish GDP growth. The run-up makes stocks vulnerable. Valuations are looking pricey and the government’s budget on 10 July might struggle to meet inflated expectations.

But if the government does follow through on reforms, the resulting growth boost bodes well for raw materials, says Walter Molano of BCP Securities. India’s economy is roughly the same size as Brazil’s and Russia’s, but it has five times as many people. Yet, it consumes just 5% of global copper production, compared to China’s 50%.

If India’s economy is transformed, it “could put a great deal of stress on the global commodity market, pushing prices exponentially higher”.

66% off newsstand price

12 issues (and much more) for just £12

That’s right. We’ll give you 12 issues of MoneyWeek magazine, complete access to our exclusive web articles, our latest wealth building reports and videos as well as our subscriber-only email… for just £12.

That’s just £1 per week for Britain’s best-selling financial magazine.

Click here to take advantage of our offer

Britain is leaving the European Union. Donald Trump is reducing America’s role in global markets. Both will have profound consequences for you as an investor.

MoneyWeek analyses the critical issues facing British investors on a weekly basis. And, unlike other publications, we provide you with the solutions to help you turn a situation to your financial advantage.

Take up our offer today, and we’ll send you three of our most important investment reports:

All three of these reports are yours when you take up our 12 issues for £12 offer today.

MoneyWeek has been advising private British investors on what to do with their money since 2000. Our calls over that period have enabled our readers to both make and save a great deal of money – hence our position as the UK’s most-trusted investment publication.

Click here to subscribe for just £12