The Nifty rose as much as 0.50 per cent to an all-time high of 6,622.80 while the Sensex also rose 0.5 per cent to a lifetime high of 22,162.52 to surpass their previous record highs hit just on Tuesday.
The strong momentum in Indian stock markets has come on the back of hopes of a stable government post elections due by May. A strong government will help accelerate the much-needed reform process and decision making needed to kick-start India's sluggish economy, growing at the slowest pace in a decade, analysts say.However a fractured mandate which seems likely at the moment does not augur well for the market and all the gains can vanish overnight. Even with this uncertainty people keep investing into this market.
Improving economic fundamentals have also helped boost sentiments on the Street, analysts say. India's current account deficit has narrowed sharply, while inflation has eased to a 25-month low.Which could reverse to some extent with poor exports, higher imports and when gold does get released this will again create issues.
The rupee's dramatic rise has added to cheer on the Street. The rupee strengthened to its highest level in eight months on Wednesday morning. It rose to 60.17 per dollar today, its highest since July 30.But bad news for exports, and IT companies which will get hit by the rise.RBI will try it's best to keep rupee below 60, and one needs to wait and watch as to how successful they will be.
ICICI Bank extended recent gains due to more buying from foreign institutional investors, while strength in other Asian markets also helped.China is slowly slipping into negative territory and lost steam going forwards.
Asian shares raced to two-week highs on Wednesday, with investor confidence getting a much needed boost from upbeat US data and lingering hopes China may take steps to stimulate its sagging economy.China stimulating at the cost of reforms and prudent financial policy is the trade off and at the moment we do not see any easing or stimulation coming by.