Indian equity markets today extended their gains o with the Nifty crossing the psychological 6000 mark in intra-day; a two year high while the Sensex managed to end above the 19,700 mark after a US deal on its so-called fiscal cliff sparked broad buying, while financial firms extended a recent rally on hopes for a rate cut this month.
Sentiments were also buttressed by good macro-economic data. Boosted by strong factory output and a spike in new orders, both of which hit their highest levels since June, India's manufacturing activity surged to a six-month high in December.
" Going ahead, we firmly believe the government policy measures will continue as downgrade fears have not been completely dispelled.This will provide further impetus to the recent rally", said Amar Ambani,Head of Research - IIFL.
However, several experts told CNBC- TV18 the current upswing is being driven by reasons of sentiment and liquidity, and may not sustain in the backdrop of weak economic fundamentals and expensive stock valuations. Weak consumer sentiment and sluggish investment cycle is likely to impact revenues of India Inc.
Earlier today, Arjun Parthasarthy said that the Indian markets are still in a bear run because Indian macro is very far from looking good.Moreover policy makers are not taking any long term fundamental steps for sustained economic growth.
As Firstpost's R Jagannathan says, "The Indian markets will revive for real when Indians have regained their faith in the India story, not foreigners." ( Read more here)
RIL, SBI, ICICI Bank, Tata Steel, Hero MotoCorp, Sun Pharma, ICICI Bank, NTPC, Bharti Airtel, Sun Pharma, BHEL, HDFC, ONGC, Dr Reddys Lab, Bajaj Auto, Tata Motors, Hindalco Inds, are among gainers in Sensex and Nifty.
Asian Markets too were higher on Wednesday. Hong Kong was up 1.91%, while Singapore gained 1.26% and Seoul rose 1.48%.Some of the gains in European markets could be tempered after reports suggested Activity among euro-zone manufacturers continued to shrink in December, as factories across the currency area's biggest economies curbed their output.
Financial markets in Japan and China were closed for a public holiday.
Meanwhile, Finance Minister P. Chidambaram speaking on 14th Finance Commission hinted at a possible hike in gold import duty.
The finance minister is mulling over the option as oil and gold import bill weigh heavy on the current account deficit situation of the country. Current account deficit has widened to 5.4% in the September quarter.