Buoyed with strong foreign inflows, the benchmark index Sensex continued its record setting spree on Tuesday with a gain of 292.20 points to end the trading at 29,571.04, while NSE Nifty also increased by 74.90 points breaching the 8,900 levels. Foreign institutions, which have bought Indian shares worth $977.3 million so far this year, purchased Rs2,002 crore ($328.75 million) on Friday, provisional exchange data showed. Capital goods and infrastructure stocks remained in action as India and the US moved ahead towards commercial nuclear cooperation.
US President Barack Obama on Tuesday left for Saudi Arabia, wrapping up his 3-day visit during which both the countries broke a seven-year logjam to operationalise a landmark civil nuclear deal, besides boosting defence and trade ties. The market took 50 trading sessions from November 12 to January 22 to reach the historic 29,000-level from 28,000. The global investor hopes that the ECB landmark bond-buying stimulus programme will revive the euro zone economy. The liquidity scenario has also improved with the surprise rate cut by the Reserve Bank of India and lower oil prices.
On the capital account front, analysts are predicting a surplus for the first time in more than seven years as falling crude oil prices and lesser gold imports would ease the pressure on the country’s trade balances. Nomura in its report, expects the current account balance to swing into a surplus of about 1.5 per cent of gross domestic product for the January to March quarter.
Morgan Stanley estimates that India may finally swing into a minor surplus of 0.3 percent of GDP in 2015. The bank cites the collapse in the price of oil - India’s largest commodity import - and lower gold imports as the two main factors helping the current account balance. Market experts believe the RBI would further cut interest rates that would revive investment sentiments.
