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10 Reasons why Sensex touched New High 2016

The ten points explain the record breaking jump in Sensex and Nifty

Policy Pulse
Publish Date: Jul 11 2016 12:14PM | Updated Date: Jul 11 2016 4:42PM

10 Reasons why Sensex touched New High 2016
BSE Sensex jumped over 450 points on Monday Nifty touched eleven month high record of 8,450. The record of Sensex is claimed to be highest since October 2015.
 
 
Also, the job index in the US increased and the world’s largest economy is on the path of recovery. 
 
 
The Developments are as under:-
 
 
1) Where, Indian stock markets participated in a global rally, following the US jobs data report, Japan led the rally in Asian markets, surging 3.5 per cent. Wall Street rose nearly 1.5 per cent, buoyed by strong jobs data on Friday.
 
 
2) The Global Central Banks are expected to further loosen their monetary policies. Many analysts percept the US Federal Reserve to delay its rate hike in the wake of Brexit, despite of strong US jobs data which has further shot up a global rally in risk assets like equities and commodities.
 
 
3) All stocks on the Nifty50 index were trading higher, led by gains in banking stocks. Private lender ICICI Bank and state-run Bank of Baroda and SBI were up between 2 per cent and 2.5 per cent, spurred by hopes of a rate cut following good progress of monsoon rains.
 
 
4) Due to severe droughts, India’s rural economy is effected, so normal monsoon rains are necessary to boost consumption-led growth. 
 
 
5) Rate-sensitive real estate and auto stocks also outperformed today. Analysts are hoping that Reserve Bank of India in its next policy meet in August will cut interest rate in the wake of the good progress of monsoon. 
 
 
6) Hopes that India Inc. will post best revenue growth in two years also boosted sentiments on the Dalal Street. Private lender IndusInd Bank will kickstart the June quarter earnings season today.
 
 
7) Optimism that the goods and services tax or GST, dubbed as the biggest tax reform since independence, may be passed in parliament soon, has also added to recent gains in domestic equities. According to estimates, the implementation of GST could boost India's GDP by 1-2 per cent.
 
 
8) Over the last few days, a number of global brokerages have turned "overweight" on India, citing improving domestic macro indicators and potential for stronger earnings growth. This has added to positive investor sentiment. 
 
 
9) The implementation of the Seventh Pay Commission's recommendations is seen to act as another catalyst for consumption in India, it added. 
 
 
10) The relative outperformance in the rupee, despite huge volatility in global currency markets post Brexit, is seen as another positive factor for the rally in equities.