Indian stocks rally over Japan stimulus, US data
November 1, 2014, 10:35 am

Investors cheered the US Federal Reserve’s decision to stick to low interest rate regime [Xinhua]

Riding high on a slew of positive developments on global and domestic fronts, key benchmark indices soared in the just-concluded week.

Indian stocks closed at a record high Friday with the BSE benchmark index Sensex closing at 27,865.83 points, 519.50 points or 1.90 percent up from the previous close of 27,346.33 points.

Stocks rose on persistent buying on hopes of more reform measures from the Narendra Modi Government which was sworn in in May.

Investors cheered the US Federal Reserve’s decision to stick to low interest rate regime.

Brokers said fresh dose of capital inflows, healthy corporate earnings and rating agency Moody’s saying it could grant India a sovereign rating upgrade also boosted buying as investors bought shares across-the-board.

Moody’s said on Friday it would revisit its assessment of India’s institutional strength if inflation metrics, investment climate, policy predictability and transparency were to show sustained improvement.

“Much-needed reforms from the new Government, strong Q2 performance by India Inc, Fed’s low interest rate regime combined with Bank of Japan’s sudden stimulus announcement gave the markets a huge boost,” said Hiren Dhakan, Associate Fund Manager, Bonanza Portfolio.

The gains recorded by the index made investors’ wealth grow by billions of U.S. dollars in single sessions over the past few days, including the giant HDFC, GAIL, Larsen&Toubro and Tata.

Indian daily, Business Standard said foreign institutional investors pumped 17.54 billion rupees ($280 million) into market stocks, making their two-day investment tally to over 30 billion rupees ($490 million).

A Reuters poll earlier this month said India’s growth will pick up as reforms draw investment.

Indian Prime Minister Narendra Modi unveiled labour reforms earlier last month that includes plans to streamline labour laws and make scrutiny of factories transparent to curb harassment by government inspectors.

This follows on the heels of a “Make in India” campaign launched in September which plans to develop infrastructure and make it easier for companies to do business in the country.

TBP and Agencies