The Sensex closed at a 25-month high of 17,711 points on Monday. The Nifty too touched the same level, 5,302, it had been at 25 months back.
The automobile, IT and healthcare sectors have contributed the most to the comeback. The auto index at the Bombay Stock Exchange rose 59 per cent in the same period.
“There were long-term positives in the budget,” said Anup Bagchi, executive director, ICICI Securities. “The markets were bound to grow.”
At the core of the 1,450-point Sensex rise since February 26, when the budget was announced, however, are the foreign institutional investors (FIIs). They pumped in Rs 18,055 crore in March alone, and Rs 1,07,266 crore in the past financial year.
What of the future? The FIIs may be bullish on India, but fears remain. “US recovery is not as fast as expected,” said the head of equity research at a multinational. “Interest rates may also rise in India in the near future. Both factors may affect the market adversely.”