Equity Markets Surge- Nifty breaches 10000 Mark - AxisDirect
Jul 25, 2017 | Source: Business Today
Equity Markets Surge as Nifty breaches 10000 Mark
The Nifty on Tuesday crossed the 10,000 mark for the first time ever in its 21 year history. The Sensex too hit an all-time high of 32,374 in early trade. The Sensex and Nifty surged nearly 21 percent this year and are likely to hit new highs in the near future, say analysts.
We look at factors which led to the Nifty scaling the five-digit mark and Sensex reaching new highs.
RBI rate cut hope - The Reserve Bank of India is expected to cut key rates in its August 2 policy meet on the back of June retail inflation falling to a five-year low on drop in food prices. Retail inflation hit a "historically low" level of 1.54 per cent in June on dip in food items such as vegetables, pulses and milk products. Currently, the repo rate and reverse repo rate stand at 6.25 percent and 6 percent, respectively. If RBI cuts rates, it will leave more money at the disposal of banks, leading to increased lending to corporates, industries and individuals aiding economic growth.
Robust economic forecasts - The International Monetary Fund (IMF) on Monday predicted India would continue to grow at a faster pace than China's in 2017 as well as 2018. The IMF retained India's GDP forecast at 7.2 cent for the current fiscal and sees it accelerating to 7.7 per cent in 2018-19. Recently, a Reuters poll of over 35 economists showed India's economy is expected to expand 7.3 percent in the fiscal year ending March 2018. A similar Reuters poll of economists predicted China would grow by 6.6 per cent in calendar year 2017.
Strong Investor Interest - During the last 10 months till June 2017, domestic institutional and foreign institutional investors have poured in Rs 97,070.13 crore into the Indian market. In July too, investors pumped in Rs 2,786.19 crore.
Strong quarterly earnings - The first quarter earnings of corporate India have come above street expectations setting a positive tone to equity market sentiments.