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India shares hit new high, beating January 2008 peak

Mumbai: Indian shares jumped to their highest-ever trading level on Friday, beating the previous record set in 2008, fuelled by strong foreign fund inflows and an easing of global economic concerns.

The Bombay Stock Exchange benchmark Sensex rose 0.38 per cent, or 82.20 points, to a new high of 21,246.72 points, led by banking and auto stocks.

The index’s previous record high was 21,206.77 on January 10, 2008.

Sentiment has been improving across Asian markets over hopes that the US central bank may delay plans to start tapering its massive stimulus programme.

India’s markets were hit earlier this year by an outflow of foreign funds over fears of an end to the US programme.

India’s slowing economic growth, weak rupee and high trade deficit also weighed on the market.

But with global and domestic fears beginning to ease, investments are starting to flow in again.

Foreign funds pumped $2.55 billion into Indian equities in October, taking their total purchases to $16.19 billion for 2013, regulatory figures show.

The appointment in September of renowned economist Raghuram Rajan as India’s new central bank governor appears to have helped, analysts say.

Rajan, a former IMF chief economist, has outlined a plan to boost investor confidence, fight high inflation and support the ailing rupee.

The rupee, which was one of the worst performing Asian currencies this year, has started to stabilise, gaining more than 10 per cent against the dollar from its record low of 68.85 in August.