Indian stocks start week at new life highs

Tuesday marked another day of records for Indian stocks after last week's rally, and the country's benchmark indices' market value was above $5 trillion.

Indian stocks hit fresh all-time highs on Tuesday.

With global cues pointing to more gains for record-high Indian stocks, traders came out all guns blazing after the market holiday on Monday on account of Eid Al Adha.

On Tuesday, the blue-chip Sensex opened at a new record high of 77,235 and rose further to a new all-time intra-day high of 77,367.

The broader Nifty 50 index started at a life high of 23,571 and jumped to a record of 23,574.

Investors will see if the Nifty can extend its gains this week.

Market value and trading volumes will also be in focus this week.

Last week, the country's stock market became a part of the exclusive $5 trillion club of the United States, China, Japan, and Hong Kong.

It took India about six months to add the latest $1 trillion to the market value of companies listed.

The fact that millions of young Indians have flocked to stock investing is a defining characteristic of gains in the last several years.

The entire record rush is fueled by domestic investors, with foreign entities staying on the sidelines.

Last week, the Nifty index gained in four out of five sessions and hit new highs every day.

Not far behind, the Sensex had two records in five days.

After a near-$400 billion wipeout on election results day, the recovery of those losses has been brisk, taking just three days.

That is the fastest recovery rate of over 5 per cent loss in the last decade.

Trade volumes jumped to a record last week, and investors are looking at further highs in the coming week.

So, what is driving this rally?

Bets that the new coalition government will focus on policy continuity and consider boosting consumer spending through tax cuts.

While the centre will focus on fiscal discipline, the broader expectations are that the new budget will benefit the Indian middle class.