Indian benchmark indices, Sensex and Nifty, continued their stellar rallies and crossed the crucial levels of 31,000 points and 9,600 points respectively for the first time ever, even as the nation celebrates Prime Minister Narendra Modi’s three years in power, marked by critical economics reforms including the push to manufacturing, radical tax overhaul and clearing of infrastructure logjam.
The benchmark Indian stock indices Sensex and Nifty have repeatedly made new all-time highs in last few trading sessions. Today, BSE Sensex hit an all-time high of 31,034.3 points in the afternoon trade, rising 1.05% intraday, continuing its stellar rise so far this year where it has returned 16.7%. The broader NSE Nifty hit its all-time high of 9,604.90 points in last hour of trade, up 1% intraday, adding to the spectacular 17.3% returns it has given since the beginning of 2017.
Indian equity markets are on a sustained rally since the beginning of this year, 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 been supported by strong foreign fund inflows, robust corporate earnings growth and remarkably improved political stability across the country.
Under the aegis of the Narendra Modi government, Sensex has grown from 24,716.88 points on 26 May 2014 to 31,034.30 points on 26 May 2017, giving a return of 24.40% in the three year period and 18.80% in the last one year. Similarly, Nifty 50, the broader of the two indices, has grown from 7,359.05 points on 26 May 2014 to 9,592.15 points on 26 May 2017, returning 29.20% in these three years and 19.80% in the last year alone.
We take a look at the factors that have helped Sensex cross the 31,000 mark.
June Series: On Friday, higher derivatives rollover led to strong follow-up buying in index heavyweights.
Earnings galore: Strong corporate earnings have proved to be a shot in the arm for sentiment. Several companies including private banks and automobile majors, have reported better than expected results, sending the markets soaring. Yesterday IOC reported a 86% jump on-year basis in net profit fiscal fourth quarter net profit.
FIIs inflows: Foreign investors, who turned buyers in a fresh spell, also aided the mood. Foreign portfolio investors inflows in equities and debt have also helped the domestic markets gain. According to NSDL data, FIIs/FPIs so far in 2017 have put in Rs 1,15,579 crore in equity and debt markets.
Indian Rupee: Indian Rupee, which has appreciated 5.12% against the US dollar so far in the current year 2017, is the best performing major currency in Asia this year. This trend may continue as experts feel low inflation expectations, high real rates, conservative monetary policy, tight fiscal policy, high political equity makes Indian Rupee an attractive long play. The Rupee opened strong today to gaining 7 paise against the US dollar in the morning trade to 64.55 amid sustained selling of the US currency by exporters and banks. The rupee has risen in last three straight trading sessions.
GST: The much awaited GST, which will subsume all central and state taxes in favour of a unified tax regime across the country, is scheduled for implementation on July 1 with the tax rates for most commodities and services getting fixed already. This has brought cheers across the country with attractive propositions which would more or less lower people’s tax bills. Also, GST is expected to reduce inflation by up to 2% as per the revenue secretary to the government of India.