India’s market is set to continue soaring on Monday after Prime Minister Narendra Modi’s landslide victory in the country’s general election.
The Nikkei 225 index is up 2.6% so far this year and the rupee has lost more than 50% of its value against the dollar.
In a bid to cool off the market, India’s central bank has announced a series of measures, including a reduction in interest rates and asset purchases, in an effort to bring the rupees back to parity with the US dollar.
But the market is still up.
The Nikkeit has jumped 4.7% in the last six weeks, while the Sensex is up 4.6%.
The rally has been fueled by a rise in investment and home sales.
The rally has driven home prices to record highs and fuelled a surge in consumer spending.
The market is currently trading at more than Rs.2,000 crore ($2.3 trillion), up by about a third from the end of June.
In comparison, India has the world’s third-largest private stock market, according to Bloomberg data.
The rally is also fueled by investors buying shares in companies that are facing a slowdown in growth due to the election result, according the Nikkeis survey.
Inflation has been a factor for some time now.
The central bank is trying to control inflation by limiting the supply of money.
That means buying more assets in the market.