The S&P BSE Sensex has hit its record closing high. The index closed above 21,004 for the first time since November 5, 2010; ending the day at 21,033.97, up 104.96 points, or 0.50 per cent. It touched an intraday high of 21,086.59 and a low of 20,937.12 in today's trade.
Its previous closing high was 21,004.96, hit on November 5, 2010.
The milestone, which looked like a possibility in May-June, got delayed by over six months.
The US Federal Reserve then surprised the global markets by hinting that it would slowly exit its loose monetary policy.
Here are five things that made Sensexmove to all-time high:
Foreign inflows: This is the one major factor which had led the rally upto May 2013 and was once again the driving force in November.
In September, the US Federal Reserve flip-flopped on its stand to wind up monetary stimulus and announced it would continue with bond purchases to keep the economy moving. Institutional investors who had exited emerging markets to park funds in US dollars began to return back. This propelled the Indian market towards new highs.
The easing is to be, as the US Federal Reserve at its ongoing meeting of FOMC is likely to reiterate its stand to continue with monetary policy right upto next year. Hence, easy liquidity will continue to flood emerging markets like India.
The benchmarks are likely to breach all-time high levels in the medium term.
Monsoon: Monsoon has been a blessing for India. The farm produce is said to be robust and thus would help tame food inflation. Also, the spending in rural India is likely to improve and help the economy. Apart from a bumper khariff crop, availability of enough will aid good rabi crop as well.
A number of companies in autos, consumers (staples/discretionary) and agri products have a high percentage of their revenue/profits coming from the rural sector. A good monsoon should boost rural consumption and be positive for these companies, says UBS report.
Indian economy is expected to grow at around 5% percent in FY14. "But for higher agricultural growth due to favourable monsoons, the GDP growth during FY14 would have been even lower," said India Ratings report.
It expects the agricultural sector to grow at 4.5 percent in this fiscal as against 1.8 percent in 2012-13.
Q2 earnings: Amidst the tough economic conditions of high interest rates, low liquidity and slowdown in GDP growth, most major companies managed to report better-than-expected quarterly figures.
"Domestic results have been surprisingly good and that has been adding to this rally and the way things are," said Sudip Bandyopadhyay, President, Destimoney Securities to ET Now.
The Street is expecting the economy to grow in the second half, say analysts. This added to the sentiment.
The pace of negative news flow seems to be over and pre-election spendings and rural demand will help boost earnings.
Trade deficit: India's burgeoning current account deficit (CAD) was making foreign investors jittery on the Indian markets. But some firm decisions by the Finance Minister P Chidambaram helped in reining it.
The finance ministry went ahead with raising diesel prices and at the same time made it difficult to import gold which was one of the major contributing factor to CAD.
"The improvement in export performance over the last two months, coupled with the contraction in non-oil import demand, has enabled a perceptible narrowing of the trade deficit with favourable implications for the current account deficit (CAD) going forward," said an RBI report.
India's trade deficit had narrowed to $6.8 billion in September, the lowest since March, 2011, when it was estimated at $3.8 billion.
"India's current account deficit is at an unsustainable level, but we expect it to gradually decline in coming years. We have, therefore, lowered our deficit forecast from 4.1 per cent of GDP to 3.4 per cent in FY14 and to 3.2 per cent in FY15," said HSBCreport.
Elections fever: The hopes of Narendra Modi-led BJP government coming to power in 2014 is also exciting the market. A few market experts have high expectations from BJP's prime ministerial candidate. They are of the view that a Modi-led BJP government will be industry-friendly.
According to Manish Sonthalia, Senior VP & Fund Manager, Motilal Oswal Asset Management - PMS, the market is witnessing a pre-state election rally. The results of the assembly elections will be announced on December 08, 2013.
"If you have the BJP winning three states or more, the Nifty could run up to 7,000 odd levels," he said to ET Now.
Source - ET NEWS
TEAM RYR&CO.
Its previous closing high was 21,004.96, hit on November 5, 2010.
The milestone, which looked like a possibility in May-June, got delayed by over six months.
The US Federal Reserve then surprised the global markets by hinting that it would slowly exit its loose monetary policy.
Here are five things that made Sensexmove to all-time high:
Foreign inflows: This is the one major factor which had led the rally upto May 2013 and was once again the driving force in November.
In September, the US Federal Reserve flip-flopped on its stand to wind up monetary stimulus and announced it would continue with bond purchases to keep the economy moving. Institutional investors who had exited emerging markets to park funds in US dollars began to return back. This propelled the Indian market towards new highs.
The easing is to be, as the US Federal Reserve at its ongoing meeting of FOMC is likely to reiterate its stand to continue with monetary policy right upto next year. Hence, easy liquidity will continue to flood emerging markets like India.
The benchmarks are likely to breach all-time high levels in the medium term.
Monsoon: Monsoon has been a blessing for India. The farm produce is said to be robust and thus would help tame food inflation. Also, the spending in rural India is likely to improve and help the economy. Apart from a bumper khariff crop, availability of enough will aid good rabi crop as well.
A number of companies in autos, consumers (staples/discretionary) and agri products have a high percentage of their revenue/profits coming from the rural sector. A good monsoon should boost rural consumption and be positive for these companies, says UBS report.
Indian economy is expected to grow at around 5% percent in FY14. "But for higher agricultural growth due to favourable monsoons, the GDP growth during FY14 would have been even lower," said India Ratings report.
It expects the agricultural sector to grow at 4.5 percent in this fiscal as against 1.8 percent in 2012-13.
Q2 earnings: Amidst the tough economic conditions of high interest rates, low liquidity and slowdown in GDP growth, most major companies managed to report better-than-expected quarterly figures.
"Domestic results have been surprisingly good and that has been adding to this rally and the way things are," said Sudip Bandyopadhyay, President, Destimoney Securities to ET Now.
The Street is expecting the economy to grow in the second half, say analysts. This added to the sentiment.
The pace of negative news flow seems to be over and pre-election spendings and rural demand will help boost earnings.
Trade deficit: India's burgeoning current account deficit (CAD) was making foreign investors jittery on the Indian markets. But some firm decisions by the Finance Minister P Chidambaram helped in reining it.
The finance ministry went ahead with raising diesel prices and at the same time made it difficult to import gold which was one of the major contributing factor to CAD.
"The improvement in export performance over the last two months, coupled with the contraction in non-oil import demand, has enabled a perceptible narrowing of the trade deficit with favourable implications for the current account deficit (CAD) going forward," said an RBI report.
India's trade deficit had narrowed to $6.8 billion in September, the lowest since March, 2011, when it was estimated at $3.8 billion.
"India's current account deficit is at an unsustainable level, but we expect it to gradually decline in coming years. We have, therefore, lowered our deficit forecast from 4.1 per cent of GDP to 3.4 per cent in FY14 and to 3.2 per cent in FY15," said HSBCreport.
Elections fever: The hopes of Narendra Modi-led BJP government coming to power in 2014 is also exciting the market. A few market experts have high expectations from BJP's prime ministerial candidate. They are of the view that a Modi-led BJP government will be industry-friendly.
According to Manish Sonthalia, Senior VP & Fund Manager, Motilal Oswal Asset Management - PMS, the market is witnessing a pre-state election rally. The results of the assembly elections will be announced on December 08, 2013.
"If you have the BJP winning three states or more, the Nifty could run up to 7,000 odd levels," he said to ET Now.
Source - ET NEWS
TEAM RYR&CO.
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