The Sensex may cross the 30,000 points mark rather easily ahead of the Union Budget to be declared on Feb 28. Here are a few reasons why analysts are gung ho ahead of the Budget 2015-16.
ECB Pumps $1.3 Trillion Through Stimulus
The European Central Bank on Thursday decided on a bond buying programme aggregating a staggering $1.3 trillion. A lot of this easy liquidity often find its way into emerging market stocks. Even if it does not it has given a sentimental boost to markets around the globe and the Sensex could rally further.
RBI Policy Meet in Feb
The Reserve Bank of India may sound hawkish ahead of its policy meet in early Feb. This could lead to further re-rating of the markets and the Sensex could touch 30,000 points mark.The RBI has already cut interest rates this year and it would be interesting to see what it does in early Feb.
Falling Crude Prices
Nobody would have guessed that crude prices would have fallen by a staggering 60 per cent since June 2014. There is a belief that crude prices would continue to stay lower. As long as that happens expect the Sensex to rally nearer the 30,000 points level.
Inflation May Remain Lower for Long
Inflation is expected to drive policy rates in the country and which in turn would drive the stock market. Interest rates are expected to be benign for a long period of time, thus pushing stock markets higher.
High Expectations From Union Budget 2015-16
The expectations from the Union Budget are very high. Analysts are expecting the government to unleash a fresh set of reforms during the budget. This itself is expected to drive the markets higher.
Rush of FII Inflows
There is a belief that there would be fund flows away from China and into India on account of growth concerns in China. This is likely to drive markets in India on FII interest as there could be a strategic shift.