The Modi-era has ushered in achchedin for stock markets, with major indices soaring to new highs. The BSE added over ₹12 lakh crore in market capitalisation in the first 100 days of the Narendra Modi Government.

The S&P BSE Sensex, NSE Nifty, S&P BSE-100, 200 and 500 indices, BSE Auto, BSE Bankex, BSE Consumer Durables, BSE Healthcare and Bank Nifty all have registered their life-time peaks in this period.

The Sensex has moved past 27,000 and the NSE’s Nifty crossed the psychological 8,000-mark effortlessly, while many analysts had predicted that would happen only by year-end.

Sectoral indices such as BSE Metal, Power and Capital Goods have registered their 52-week highs, making the rally more broad-based. These sectors have been under pressure, plagued by a prolonged economic slowdown and dissatisfaction with the previous Government.

FII inflows Since the new Government took over, foreign investors have pumped in over ₹45,000 crore ($7.5 billion) into Indian equities, taking the total investments to ₹77,803.24 crore ($12.947 billion) this fiscal.

According to a study by Bank of America-Merrill Lynch, foreign institutional investors’ ownership in the Sensex hit an all-time high of 22.5 per cent in the June quarter.

The mutual fund industry’s assets under management crossed ₹10 lakh crore. What is heartening is the interest of small investors in equity mutual funds. These investors have avoided stocks since the 2008 rout.

Gautam Chhaochharia, Head of India Research, UBS, said several small steps in the right direction have boosted the confidence on Indian equity.

“Foreign direct investment in defence and railway infrastructure projects and proposals on real estate investment trusts/ infrastructure investment trusts are some of the initiatives welcomed by all,” he said, adding UBS maintains a year-end target of 8,000 for Nifty.

There is progress even in complex areas such as labour reforms, Good and Services Tax roll-out and initiating amendments to the Land Acquisition Act, Gautam added.

In a note, Mirae Asset Global Investments, one of the world’s largest investment managers in emerging market equities, said Modi’s team had quickly settled down to address pressing issues of policy paralysis. “Modi’s growth model is a blend of China-like infrastructure, coupled with Singapore-like bureaucratic efficiency, adapted to India,” Mirae said. “We believe India is on the cusp of a multi-year bull market.”

Signs of recovery Anoop Bhaskar, Group President and Head of Equity, UTI Mutual Fund, said: “We are seeing signs of economic recovery after three years of slowdown. Various sectors are now showing signs of bottoming out from the slowdown. One has to wait and see whether it could be V-shaped or U-shaped on the economic front.”

Every general election presents optimism in stock markets and after the three months, the momentum peters out. “But this time, the market has been performing well as for the first time after 1984 we got a single party rule, and expectations are running high,” he added.

In this Government, no individual is trying to hog the limelight and for the first time in several years, supremacy of the Prime Minister’s authority has been visible.

Besides, a change in the Government work culture, empowering bureaucrats and fast decision-making signal that the budgeted amount will be put to use more efficiently, Bhaskar said.

Ramesh Chordia, an independent analyst based out of Chennai, said: “The first 100 days’ show at the market is just a trailer ahead of the main picture. By the time he (Modi) finishes 1,000 days in office, most of us would have been enjoying the fruits of the benefits.”

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