Sensex rises to record high of 21,525, Nifty witnesses similar climb
6 March 2014 5:25 PM GMT
The Sensex hit a record high of 21,525.14, while Nifty was just near its all-time high.
The strong rally has defied expectations that foreign investors would grow more cautious as the Federal Reserve continues to withdraw its monetary stimulus and ahead of general elections set to kick off on 7 April.
Instead, overseas investors have bought heavily into India as a sharply narrowing current account deficit and a more stable rupee have increased confidence in a country that only last year was in the midst of its biggest market turmoil since the balance of payments crisis of 1991.
'The rally has more legs to go. Positivity around elections, improving macro, it's all falling in place' said Deven Choksey, managing director at K R Choksey Securities.
The BSE Sensex was up 1.14 per cent at 3.11pm Nifty was up 1.2 per cent, not far from its record high of 6,415.25 points hit on 9 December.
The rally comes as foreign investors have been buyers of Indian shares for 14 consecutive sessions for a net total of about $900 million.
India is the only share market after Indonesia to turn positive for the year among the 'Fragile Five' economies, or those countries whose large current account deficits were seen as making them particularly vulnerable to foreign outflows.
In India, the current account deficit has narrowed sharply, to 0.9 per cent of gross domestic product in the October-December quarter, according to data on Wednesday, improving sharply from the record high of 4.8 per cent of GDP in the year ended in March 2013.
The improving current account deficit, and the strong foreign inflows, have also boosted the rupee, which is up 12.2 per cent since hitting a record low in late August.
Blue chips have been the main drivers of the rally. On Thursday, ICICI Bank gained 3.2 per cent while and Reliance Industries rose 1.9 per cent.
The strong rally has defied expectations that foreign investors would grow more cautious as the Federal Reserve continues to withdraw its monetary stimulus and ahead of general elections set to kick off on 7 April.
Instead, overseas investors have bought heavily into India as a sharply narrowing current account deficit and a more stable rupee have increased confidence in a country that only last year was in the midst of its biggest market turmoil since the balance of payments crisis of 1991.
'The rally has more legs to go. Positivity around elections, improving macro, it's all falling in place' said Deven Choksey, managing director at K R Choksey Securities.
The BSE Sensex was up 1.14 per cent at 3.11pm Nifty was up 1.2 per cent, not far from its record high of 6,415.25 points hit on 9 December.
The rally comes as foreign investors have been buyers of Indian shares for 14 consecutive sessions for a net total of about $900 million.
India is the only share market after Indonesia to turn positive for the year among the 'Fragile Five' economies, or those countries whose large current account deficits were seen as making them particularly vulnerable to foreign outflows.
In India, the current account deficit has narrowed sharply, to 0.9 per cent of gross domestic product in the October-December quarter, according to data on Wednesday, improving sharply from the record high of 4.8 per cent of GDP in the year ended in March 2013.
The improving current account deficit, and the strong foreign inflows, have also boosted the rupee, which is up 12.2 per cent since hitting a record low in late August.
Blue chips have been the main drivers of the rally. On Thursday, ICICI Bank gained 3.2 per cent while and Reliance Industries rose 1.9 per cent.
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