But this was also a yo-yo year for the BSE benchmark, with the Sensex swinging wildly in a range of 5,794.44 points, touching a low of 8,929.44 points on June 14, 2006 and a high of 14,723.88 points on February 9, 2007. The year witnessed two major downsides, the first being an historic crash in May 2006 coming as the US Federal Reserve hiked interest rates, and the second meltdown in February 2007, resulting from the unwinding of the yen carry trade. Despite the high drama in which the benchmark indices--the Sensex and S&P CNX Nifty--lost nearly 15% in value, the market showed resilience and bounced back in style.
Raamdeo Agarwal, MD, Motilal Oswal Securities, said, The equity market is completing its fourth year of a bull run with a gain of nearly 15%, which is a good sign. In the last year, rising domestic interest rates have played spoilsport, pulling down market valuations. FY08 would see another 10-15% upside movement, but it may not witness a dream run.
A series of measures taken by the RBI in the form of hiking the repo rate and the cash reserve ratio--the latest round as recent as Friday--to contain inflation was never well received by market players. Measures taken by the Centre, such as banning the export of certain goods and waiving import duties on select articles, also had a negative impact.
The Sensex ended on Friday, the last trading day of FY07, at 13,072.10 points, a gain of 92.44 points, or 0.71% over its previous close, while the Nifty closed the week with a gain of 23.45 points, or 0.62%, at 3,821.55 points.