Markets hit a historic high in early trade on Wednesday, with the Sensex breaching the 30,000 mark.

Experts said the Sensex has soared cheering the Reserve Bank of India's repo rate cut by 25 bps.

Commenting on the historic high, Jayant Manglik, President, retail distribution, Religare Securities Ltd, said: "A combination of expectations, a good budget and the repo rate cut has pushed the Sensex over the new milestone of 30,000. Ultimately it is just a number. In the first quarter of FY16, it will have to be backed up by corporate earnings growth to sustain. Till then, all round optimism will keep markets firm.''

He added in a statement that over the long term, "We are confident that the measures taken by the government will translate into industry growth and a Sensex of 40,000 by 2017 is absolutely achievable.''

With regard to the repo rate cut of 25 basis points, the second one by RBI since January 2015, Manglik said the speed at which decisions are being taken augurs well for the Indian economy.

"It is clear that lower inflation will help RBI make these decisions periodically. Cheaper availability of funds is also an important ingredient to fund the projected double-digit growth, even if it is at the cost of slightly higher fiscal deficit which has been built into the increased fiscal deficit targets for the next three years,'' he said in a statement.

He added that the rate cut may make Indian debt less attractive to FPIs (foreign portfolio investors), "but since the budget’s FPI MAT provisions are in favour of FIIs (Foreign Institutional Investors) taking the equity route, this may not matter as much''.

He pointed out that the strategy works well in the global scenario too. "The US Fed has indicated that it may not raise rates immediately and our lower rates will discourage fund flows from the EU, which has negative interest rates, which means no hot money outflows or inflows expected.''

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