Analysts expect the current rally in Indian equities to continue even as markets hit a record high for the fourth straight day on Wednesday. The BSE Sensex hit an all-time high of 25,735, while the broader Nifty touched 7,700 for first time.
Brokerage firm Prabhudas Lilladher believes the rally would continue at least till the Union Budget is announced next month.
"In the run-up to the Budget, there are so many rumours flying around...till Budget the market will continue to rally. Even if there is some correction, it will be short-lived," Dilip Bhat, joint managing director of Prabhudas Lilladher told NDTV. (Watch)
The combined market capitalisation of India's publicly listed companies has risen to $1.5 trillion, or nearly Rs 90 lakh crore, as billions of dollars poured into India in the wake of Narendra Modi's stunning election victory last month.
"I think all the stocks are hitting new highs and I think there is kind of a euphoric madness that is going on across the broader markets," Mr Bhat said.
Echoing most analysts' sentiments, Mr Bhat attributed the gains in the stock markets to the Modi-led Bharatiya Janata Party's (BJP) strong mandate in the elections.
"After a long time, there is a mood of optimism and everybody wants to believe that now something good is going to happen. That is what the magic is of a decisive mandate and a strong leader which is there at the moment," he said.
Mr Bhatt compared the "euphoric movement" in stock prices to the rally in 2006-07 when equity had risen on the back of strong GDP (gross domestic product) growth of 9.6 per cent.
"The optimism is endless, the euphoric movement in the stock prices is also very reminiscent of what really happened in 2006-07 and the best part is the economy is yet to wake up and is yet to even walk forget about running...because right now it's limping very badly," he said.
India's economy last fiscal grew at sub-5 per cent for a second consecutive year, marking the worst slowdown in 25 years.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
