Sensex Cheers GDP Data, Rises 250 Points; Nifty Near 8,950

BSE Sensex and Nifty rose sharply higher on Wednesday amid mostly higher Asian markets. Dalal Street cheered the better-than-expected third-quarter GDP numbers. Annual gross domestic product (GDP) growth for the October-December period came in at 7 per cent, a tad slower than 7.4 per cent in the previous quarter but much faster than the 6.4 per cent expansion forecast by economists in a Reuters poll. The Sensex rose over 250 points while Nifty hovered near 8,950.  The breadth of the market remained strong with midcap and smallcap stocks also inching higher. Indian stock markets have rallied close to 10 per cent this year. Better-than-expected earnings from India Inc, a supportive Budget and strong global markets have boosted the sentiment on Dalal Street. 

Domestic institutional investors have been big drivers of the current leg of the market rally.  In last two months (December and January) they have bought shares worth over Rs 14,000 crore. 

A big part of the domestic inflows has also been driven by retail investors through systematic investment plans (SIPs) in equity mutual funds. Experts say that nearly Rs 3,000 crore is invested by domestic retail investors through this route every month. A systematic investment plan (SIP) is an investment option offered by mutual funds that help to invest a fixed amount at periodic intervals over a fixed period of time.

Foreign institutional investors have also started to nibble at Indian equities after being big sellers of domestic stocks over last four months. In this month so far FIIs have bought shares worth Rs 9,359 crore in cash market.  The Indian currency has hold up well against a rising dollar. A supportive Budget and steady RBI monetary policy has propped up the rupee.

Asian markets were mostly higher today. US President Donald Trump today opened the door to a broad overhaul of the US immigration system and vowed to pursue massive tax relief for the middle class in a speech to Congress.