Sensex is the Indian (EPI) benchmark index. It closed above the 32,000 mark for the first time on July 13.
This was due largely to an influx of capital into Indian markets. There has been considereable foreign portfolio investment. In addition, domestic investment has helped the country’s indexes reach new highs.
Foreign investors pushed ~177 billion rupees into Indian capital (INDY) markets. This has mainly been due to the reforms undertaken by the government.
One significant tax reform is the goods and services tax (or GST). It was rolled out on July 1. It is expected to keep investors jittery until it’s completely absorbed by the market. However, in the long term GST is expected to benefit the Indian market. It is expected to result in improved tax collection and administration. The sectors that will likely benefit most are metals (DBB) and consumer goods (XLF). This will be as a result of likely fall in production costs.