Indian benchmark indices made new lifetime highs with the NSE Nifty 50 topping 9,400 for the first time ever and the BSE Sensex too closing at new all-time high, bolstered by encouraging monsoon forecast in a heavily agri-dependent economy, and continued FII buying.
Today, Nifty made a new all-time high of 9,414.75 points, while Sensex climbed to a record 30,259.71 points in late afternoon trade. Both the indices also closed at record highs, with the Nifty ending the day at 9,410.15 points while Sensex ending at 30,248 points.
The Indian Meteorological Department (IMD) yesterday said that the monsoon this year could be ‘normal’ and may bring 100 per cent rainfall instead of 96 per cent it had predicted earlier (read full story). The new forecast for monsoon is expected to give a boost to the rural economy. The monsoon delivers about 70% of India’s annual rainfall, critical for growing crops such as rice, cane, corn, cotton and soybeans because nearly half of the country’s farmland lacks irrigation. India defines average, or normal, rainfall as between 96% and 104% of the 50-year average.
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Sentiment got a further boost as data showed that foreign funds, which were largely net sellers on the Indian exchanges for some time, made fresh purchases in yesterday’s trade.
Today nearly all the sectoral indices were trading higher in early trade with the rally being led by FMCG, metal, consumer durables, oil & gas and power stocks.
Other Asian markets were trading higher following an overnight positive lead from European and US markets. Among other Asian markets, Hong Kong’s Hang Sang was up 0.64 per cent while Japan’s Nikkei gained 0.30 per cent in early trade. Shanghai Composite Index too was up 0.18 per cent.
Bharti Airtel and Hindustan Unilever helped the benchmark indices zoom to their new lifetime highs as they rose 8% and 4.65% respectively. Shares of Bharti Airtel closed at Rs 371.90 while shares of Hindustan Unilever closed at Rs 996.95. Airtel shares were up on the better than expected subscriber additions in the fiscal fourth quarter (Read: Full story | Key figures).
Indian markets are on a sustained rally, supported by BJP’s recent landslide win in UP state elections, prospects for a revival in corporate earnings, implementation of GST (Goods and Services Tax), expectations of good monsoon and an upmove in the global markets. The rally has also been supported by renewed heavy buying from foreign investors, which had subdued to some extent since the March quarter. However, the meteoric rise has raised questions about the sustainability of valuation, which many already see as stretched.