Mumbai : Indian benchmark indices Sensex and Nifty on Thursday logged new lifetime highs on the back of all-round buying by overseas investors triggered by a slew of positive factors, including sharp drop in Current Account Deficit.
The Sensex hit a high of 21,525, surpassing its previous peak of 21,483.74. The broader Nifty edged above the key 6,400 levels and came within 10 points of breaking past its previous record. The historical feat for market came a day after poll dates for electing a new government at the centre were announced. Incidentally, the Sensex has gained in the month before elections in each of the previous six elections, with the biggest advance coming in 2009 when the Congress-led United Progressive Alliance won a majority, according to Reuters.
The rally was partially fuelled by optimism that the pro-reform Bharatiya Janata Party stands a better chance of forming a government at the Centre. Market players expect the momentum to persist on growing optimism of a stable government at the Centre.
“The pre-election rally has begun. With two more months to go for the elections, we believe the rally will continue,” said Gautam Trivedi, managing director and head of equities at Religare Capital Markets.
Investors are also convinced about the decisiveness on implementation of reforms by the next government.
“I feel a strong political mandate would result in increasing level of optimism and hence new levels for the market,” said Motilal Oswal, chairman and managing director, Motilal Oswal Financial Services Ltd.
Latest economic data on inflation and current account deficit, which showed mark-ed improvement, have also fuelled hopes of a revival in the economy earlier than expected.
Market experts said India Inc, at the very least, can now expect the end of policy paralysis. Recent inflows by foreign institutional investors too indicate renewed faith in the market and economy.
Priya Kansara Pandya