Sensex is up more than 70% in this calendar year 2009 with just one more month to go. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up more than 8000 points (100%) at the end of November 2009. A setback towards the end of the month did pull the markets in the red, as Dubai's debt problems sparked concerns about corporate exposure and the risk of foreign investors repatriating funds. Sensex fell below the psychological 17,000 mark and Nifty fell below the key 5000 mark.
Dubai's financial health came under scrutiny after a major government-owned investment company asked for a six-month delay on repaying its debts. Dubai World, which has total debts of $59 billion, is asking creditors if it can postpone its forthcoming payments until May next year. The company has been hit hard by the global credit crunch and recession. It was due to repay $3.5 billion of its debts next month. The request for a delay in repayments led to major credit ratings agencies downgrading a number of Dubai state backed companies.
From India’s point of view the effect now seems to be more localized to Indians mainly Keralites working in Dubai and businesses with direct links with Dubai. Whether this is all, and FIIs continue to view India as a safer haven amongst the emerging economies, we will know in next few months. But the going for the present seems buoyant with the good GDP numbers for now.