The markets have scaled a new all time high. From being merely optimistic, the markets have now turned so exuberant that all targets on the higher side look small. From 20000 in November 2013 the Sensex hit 24000 in mid-May, and is currently trading slightly above 26000. The depth of this phenomenal rally is really interesting. The BSE Mid Cap Index has appreciated by 24 per cent in just over a little more than two months, while the Small Cap index has done even better, rising by a huge 34 per cent between the same period.

This kind of one sided rise is probably unprecedented. But the best thing about the markets right now is the belief in the fundamental strength of the economy that is driving it up. Fundamentals have come back to play a pivotal role in steering the markets in the past month or slightly more than that. Globally, while the economic situation has been improving, geopolitical disturbances have been raising their heads. Ukraine, Russia, Iraq and Israel are boiling pots. That should have ideally put a brake on the market’s upward move. But, what is happening is completely opposite to that. It just doesn’t seem that this market will ever look back.

The FIIs have pumped in more than Rs 70000 crore in Indian equities year-to-date. That surely explains the rise that benchmarks have seen so far. This class of investors has been a major driving force for the Indian equity markets for ever. The retail investor is yet to come and all of the action so far is, thanks only to the strength of the big money coming from these overseas investors. The conviction that the FIIs have in the Indian markets is backed by some solid fundamental factors.

The new government’s action plan has kicked in with the announcement of its first budget. It is now time for action on the ground, which would in turn translate into pure economic growth and hence keep the market’s upward trajectory intact. There are many good things in the Budget which have probably been sidelined by naysayers in their analysis. The government’s intent of cutting red tape and ushering in an era of quick and effective decision making is one of the most important among them. That should help a lot going forward. Coming back to what the market’s are up to, a look at the line up of companies vying to hit the markets with their primary issues, should tell you what the mid to long term future looks like.

There are close to 20 companies which have been reported to have either lined up their IPOs or are looking at raising funds from the primary markets. These companies put together are looking at raising a sum of close to Rs 17900 crore. That speaks a lot about the confidence that the market’s are exuding right now. Another factor that reflects this point is the monies being raised by companies like Flipkart. The emerging e-commerce giant is reportedly about to announce one of the biggest fund raising by any e-commerce company very soon. It is looking at USD 1 billion which will come from its existing investors. This speaks a lot about the influence that Indian businesses are having on foreign investors. All this should keep the Bulls in charge at least for some more time in the near future.

We are almost at the end of another trading week; a week, which has been quite good for the markets, not only on the domestic front but also globally. Encouraging economic data points, especially from the US have helped keep the sentiment buoyant. The principal factor driving markets all over is the ongoing earnings season. US markets finished mixed yesterday. While earnings have been driving markets there too, Ukraine has been a big worry affecting the markets there. The Dow was down 0.16% while the S&P500 was up 0.18%. Nasdaq finished almost half a percent up.

Asian markets are all green today. Stronger corporate numbers coupled with the sentimental push that the western markets are providing have helped Asian markets gain strength. The Shanghai Composite in China is up by a good 0.84%, while the Japanese Nikkei is trading 0.15% above its yesterday’s close. Singapore and Hong Kong are up an average quarter percent as of now and all other benchmarks including Korea, Taiwan, Indonesia and Malaysia are up an average 0.15% in early trades.

The buoyancy of the global markets will help the Indian markets maintain their upward traction to a large extent. However, a little bit of profit booking from life time highs is not ruled out. As the week draws to a close, some money will move off the table, waiting to be invested over the next week when we head towards the monthly F&O expiry. That said, take advantage of the broader Bull Run and be prepared for intermittent profit booking sessions.