Brokers have attributed the rally to investor hopes of a stable government after elections and signs of economy returning to high growth path. Foreign investors, the main drivers of Indian stock markets, have made net inflows of a whopping nearly Rs 80,000 crore in the domestic stocks during the current fiscal year.
Marketmen said that sentiment in the stock market picked up following euphoria related to general elections and on hopes that a BJP-led government will come into power in the upcoming Lok Sabha elections starting next month. Analysts expects that the Bharatiya Janata Party would win elections set to conclude by mid-May and this has fuelled rally in the stock market, given the party's perception of having a more market-friendly stance.
Besides, hopes that the country's economy will improve on the back of easing inflation have also played a key role in stellar market performance, they said.
Markets are waiting for the election outcome, which will have a major impact, an expert said.
"If BJP will come in power after the elections, it will be taken as a signal for stability in the economy and stock markets will take it very positively and a significant upside in the markets could be seen which will take indices to a completely new higher levels," said Vivek Gupta, Director Research, CapitalVia Global Research Limited. The levels may be as high as levels of 7,300-7,800 gradually in Nifty. Sectors like PSU banks, capital goods and infrastructure will be the main sectors which can show significant upside in the coming future, he added.
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