The pace of foreign fund inflows has come despite the US Fed reducing its bond purchase programme. Dealers say that there is no stopping FIIs who have now turned bullish on India, on hopes of a Narendra Modi led government at the centre.
On Monday the Sensex closed at a new lifetime high of 22,055 points as FIIs net bought in Indian equities in excess of Rs 1400 crores.
Some market participants feel there maybe more to come at least until the election results are known. The rally may thus continue for the next two months with banking stocks, particularly the private sector banks likely to see sustained buying.
Some cynics, however, argue that the rally maybe overdone. They feel that even if the nation has a NDA government at the centre things are unlikely to improve overnight. Fresh investment will work with a definite time lag and Narendra Modi does not have a magic wand to turn things overnight.
Analysts also feel that high inflation along with high interest rates is likely to stay for some more time. At least on this count the over exuberance from FIIs may be a little over done.
But, more often than not, fundamentals are often tossed out ahead of a key event. Indonesia like India which has an election slated is witnessing a similar momentum.