The CNX Nifty hit the 8,900 mark for the first time in 18 months. In intra-day trading, Nifty touched a high of 8,905.10, a level last seen on 5 March 2015, and gained as much as 1.08% from its previous close.
India’s benchmark Sensex index touched a high of 28,843.48, a level last seen on 16 April 2015, and gained as much as 1.1%. Both indices gained in five out of the last six trading sessions.
Main Reasons:
Liquidity has been one big global factor driving markets higher as investors look for higher yields in emerging markets as against the negative yields prevalent in several developed markets.
Apart from this, the unexpected Brexit and its consequent potential impact on Eurozone growth have only increased global growth uncertainties.
Moreover, the delay in US Fed rate hikes has helped the flow of capital sustain in favour of emerging markets.
The US economy added 151,000 jobs in August, with the unemployment rate coming in at 4.9%. This led to a drop in market expectations for a September rate hike to 24% from 27% .
Foreign investors have bought $6.05 billion in local equity markets so far this calendar year, pushing up the Sensex by 10.4%.
Reform measures in India such as the proposed goods and services tax, good monsoons and the 7th Pay Commission are expected to boost consumption demand and earnings.
