Sensex crossed the 32,500 level for the first time today.
Indian stocks markets continued their record run today, with Sensex advancing nearly 250 points to 32,633 and Nifty rising to 10,101 at day's high. The latest political development in Bihar and a global rally boosted domestic sentiments. Nitish Kumar took oath as Bihar Chief Minister for the sixth time today, ending his two-year-old alliance with Lalu Yadav and the Congress. He is back with the BJP, whose Sushil Modi was also sworn in; he gets his old post of Deputy Chief Minister back. The rupee also rose to 64.07 against the US dollar. Yes Bank extended gains after posting better-than-expected earnings. Yes Bank rose 4.6 per cent today after surging nearly 6 per cent on Wednesday. HCL Tech, which announced better-than-expected earnings earlier in the day, also gained over 3 per cent.
Here are 10 updates:
- Sanjiv Bhasin, EVP-Markets & Corp Affairs, India Infoline, said that the Bihar political development signifies more political stability and could lead to more economic reform initiatives from the NDA government.
- A series of positive news including the Bharatiya Janata Party's strong win in UP elections, stable rupee, normal monsoon, smooth initial rollout of GST, reform initiatives of the government and macro-economic improvement have helped Indian stock market benchmark Nifty to be one of the world's top gainers. The Nifty has rallied nearly 23 per cent this year.
- The rupee has also gained over 5.5 per cent so far this year against the dollar, making the Indian currency one of the top performers in Asia. Improving domestic macro-economic fundamentals, falling inflation, strong FDI flows and overseas inflows into the Indian markets have supported the outperformance of the Indian currency.
- Overseas investors have pumped in around $2.5 billion in the capital markets this month, enthused by smooth initial roll-out of GST and on hopes of better corporate earnings, taking their total investment to $25 billion so far this year.
- The sharp fall in inflation has also triggered hopes of a rate cut by the Reserve Bank of India (RBI) when the monetary policy committee meets early next month.
- The RBI has kept its repo rate unchanged since October last year.
- Analysts see Indian economy rebounding this fiscal year after demonetisation pulled down the GDP growth rate to 6.1 per cent in the January-March quarter. The International Monetary Fund or IMF in its latest update projects India's GDP to grow at 7.2 per cent in 2017-18 and accelerate further to 7.7 per cent in 2018-19.
- A rally in global markets also boosted the domestic sentiment. Stocks, bonds and commodities were all on a roll in across Asian markets today after US Federal Reserve left interest rates unchanged overnight.
- MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.9 percent to heights not seen since December 2007. It has gained over 5 percent so far this month. Overnight, US stocks also hit record highs on another day of strong earnings reports.
- The Fed's slightly more dovish tone also weakened the US dollar, which fell to a 13-month low against a basket of global currencies. The US central bank noted that both overall and core inflation had declined and removed the qualifier "recently", perhaps suggesting concerns the slowdown might not be temporary.
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