The Sensex today scaled 26,000 levels, continuing with its record-breaking binge, ahead of the Union Budget by Arun Jaitley.
IT, realty, power and metal stocks supported the momentum of the 50-share Nifty index which managed to scale fresh record high of 7,792.
The S&P BSE Sensex ended at 26,100.08, up 138.02 points or 0.53 per cent. It touched an all-time high of 26,123.55 and a low of 25,992.73 in trade today.
The 50-share index nifty closed at 7,787.15, up 35.55 points or 0.46 per cent. It touched an all-time high of 7,792 and a low of 7,755.10 in trade today.
Finance Minister Arun Jaitley will present the Union Budget in the Parliament on July 10. There are high expectations from the Budget as the new government doesn't have any coalition compulsions and Prime Minister Narendra Modi has given hopes of a growth-oriented economic policy.
Even as the Budget event is a few days away, the Indian markets are at life-time high in the pre-Budget rally. Investors are bullish on equities and a rally is seen across the board. Let it be cyclicals, defensives or midcaps; valuations of most of them are running high.
- The government will have to pursue the divestment route to generate revenues. The SEBI has made it easy for the finance minister as it made mandatory for all listed PSUs to achieve a minimum public shareholding of 25 per cent within three years. This move will help the government to raise around Rs 60,000 crore through the PSU stake sale against the target of Rs 52,000 crore.
- At rupee at 60 per dollar mark, higher crude oil price puts pressure on the government's finances. Nearly 70 per cent of India's import is oil and continuation of high prices would have strained the government's budgetary plans. Every US$10/barrel rise would have shaved 0.5 per cent off India's GDP.
- The easing of crude oil prices is a positive development for the new government. The Brent crude oil price had shot up to $115 per barrel recently due to the on-going sectarian war in Iraq. This forced the government to hike the prices of diesel, petrol and on-subsidised LPG cylinders.