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Last Updated: Tuesday, 19 August, 2003, 12:18 GMT 13:18 UK
Investors celebrate Indian share boom
Bombay traders
Bombay stocks are at a 29 month high
Indian share prices continued to make giddy progress on Tuesday by closing above 4,000 for the first time in two and half years.

Indian stocks have experienced a bull run recently following signs of an economic recovery.

Monsoon rains have also helped to boost crops and the incomes of Indian farmers.

The Mumbai Sensex index of blue-chip stocks finished the day up 0.73% at 4006.91 points. During the session, it hit a high of 4026.27.

Breaking through the 4,000 barrier is seen as a major psychological boost for the market.

Valuations are still attractive when compared with regional peers
Krishnamurthy Vijayan
J.M. Capital Management
The gains follow an impressive performance on Monday, when shares rose 1.44%, surging to a 29-month high.

"Valuations are still attractive when compared with regional peers, given India's growth expectations," said Krishnamurthy Vijayan, chief executive at J.M. Capital Management.

Economic rebound

Last week, India's central bank raised growth estimates for the economy.

Reserve Bank of India Governor Bimal Jalan told a local television channel that he saw good monsoon rains boosting growth to over 6% - the bank's original forecast.

This year the monsoon rainfall has been 3% higher than average, following India's worst drought in 15 years.

The boost to farmers' incomes is in turn increasing demand for manufactured goods, including steel and cement.

Shares in cement makers rose as a result, with India's biggest producer, Grasim Industries, gaining 1.6%.

The Mumbai Sensex has risen by a quarter in dollar terms since the monsoon season began on 7 June.

JC Parikh, the stock exchange's former chairman, said the steady rise in shares had also been helped by the easing of tensions with Pakistan.

FTSE 100
5786.97 -
Cac 40
5057.74 -
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