DNA Money Edit: For bulls, India's improved GDP growth will be a booster shot

Nifty on Tuesday created history by conquering another peak of 10000. The rollout of goods and services tax (GST), good monsoon rains, dollar inflows into the country and declining inflation have given stock market bulls an unprecedented booster shot. The theory that the two government moves--domonetisation and GST -- have helped reduce black money in circulation, and that many are diverting money into stocks has gained ground.

India's economic growth is slowly gaining pace after a slow-paced year that has given the market another shot in the arm. The International Monetary Fund (IMF) retained India's economic growth projections at 7.2% in 2017-18 and predicted 7.7% growth in 2018-19, marginally up from 7.1% in the previous year. India's growth, says IMF, will accelerate to 7.7% in 2018-19. It says the growth in India is likely to pick up further in 2017 and 2018, though it is certain that the growth rate clocked in 2015-16 would not be achieved even in 2018-19.

While maintaining the same global economic growth rate at 3.5% in 2017 and 3.6% in 2018, IMF predicts that India's economy would be the fastest growing among large economies. China's economy is projected to grow by 6.7% in 2017, up 0.1% from the April forecast, and 6.4% in 2018, up by 0.2% from earlier forecasts by the IMF.

This is indeed positive news for India's stock markets. Nifty took 11 years to reach 5000 and another 10 years to cross 10000. Investors will keep a close watch on Nifty's next moves.