Sensex at record high
The confidence brought in by the idea of a stable government which is likely to remain in power for the next couple of years, plus the drop in retail prices of essential commodities has brought buoyancy in the market
Pune: Despite the glum situation after the roll-out of GST, Sensex hit a record high when it opened at 32,020 on Thursday. Many domestic and international trends caused this, including drop in retail inflation, a record high of forex reserves, US Fed Chair Janet Yellen's statement about slower-than-expected interest rate hike, etc.
Speaking specifically about the post-GST, post-demonetisation economy, many traders involved in the share market said that despite the economic reforms in the country, there is a sort of confidence in the market. “The confidence brought in by the idea of a stable government which is likely to remain in power for the next couple of years, plus the drop in retail prices of essential commodities has brought buoyancy in the market,” a trader said.
Co-Founder and Head of Trading, Zerodha, Nikhil Kamath said, “When you look at the market, there is a lot more money coming into the system. Investments are readily available following government policies aimed at bringing transparency. Inclusion in the financial market too is at an all-time high due to which more money is flowing into the market. These factors coupled with the tax rebates available while investing has led more and more people to invest in the share market.”
Kamath added that under-performance of other investment avenues has prompted people to invest in shares. “Aided by the fact that gold has not performed very well in the last one-and-a-half years and nor has the real estate sector, people are moving towards shares,” he added. He stated that there is more liquidity in the market too. “The stock market is moved more by sentiment rather than actual state of the economy. So, despite demonetisation and GST, there is a perception of stability and liquidity in the market,” Kamath said.