The markets are on fire with the Sensex closing at a new lifetime high of 21,513 points. Here are five reasons why the Sensex has scaled a new peak and is looking good for more.
A saffron wave
The Indian markets are clearly seeing a Modi wave as more opinion polls predict a surge for the Modi led NDA government in the forthcoming elections. Markets are enthused by the possibility of a NAMO led government, which would be able to push through economic reforms.
Back with a bang
From a low of 68.81 hit against the dollar last year, the rupee has recovered sharply. On Thursday, the currency rallied as much as one per cent, following sharp reduction in the current account deficit. Gains in the rupee propelled buying from foreign funds, which pushed the indices to a record level.
At just $4.2 billion, CAD is good news
India's current account deficit (CAD) for the quarter ending Dec 31, 2013, shrank significantly to just $4.2 billion, thanks to rising exports and falling imports. This was one figure that had threatened to go out of control in the middle of last year. Falling CAD is good news for the rupee.
They are back
Foreign funds have pumped in more than 1 billion dollars in 15 consecutive trading sessions. This has clearly pushed the Nifty and the Sensex to record highs.
The present rally started after tensions in Ukraine reduced after Russian President Vladimir Putin asked troops to return to base. Less geo-political tensions always propels the markets higher.