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Markets started the week on a firm note with the Nifty hitting fresh high once again on Monday. Widespread optimism about faster than anticipated economic recovery led the markets. The Nifty edged 147.15 points or 0.95% higher at 15,582.80 . The BSE Sensex was up 514.56 points or 1% at 51,937.44.

Markets in other Asia-Pacific region were mixed on Monday with Shanghai composite rising 0.41% while Hong Kong’s Hang Seng index fell about 0.2%.

The gross domestic product (GDP) data for overall financial year 2021 and fourth quarter indicated that unlocking of business operations drove economic growth for two quarters, confirming growth momentum had started to build in since Q3FY21.

“The markets were awaiting India’s GDP and fiscal deficit number which has come in better than expectation. The overall structure of the market remains positive as fresh covid cases continue to decline and investors are upbeat about unlocking of economy in June which will help revive commercial activities. Hopes of further stimulus by government is also bolstering investor confidence," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said.

The GDP growth print for overall FY21 and Q4FY21 at -7.3% and 1.6% respectively. Fiscal deficit for FY21 was at 9.3% of the GDP, lower than 9.5% estimated by the Finance Ministry.

According to Radhika Rao, Economist, DBS Bank Ltd said, essence of the March quarter growth numbers is that the trend benefited from a nearly linear unlocking process from the first covid wave, with upside surprise concentrated in a modest return in consumption, strong construction rebound, and manufacturing output.

“Cases have tapered off in recent weeks, however in contrast to last year, the unlocking process won’t be linear, as states exercise more discretion, making the unwinding in restrictions more staggered and less predictable. We maintain our FY22 growth projection at 9.5% year-on-year from a revised -7.3% in FY21," said Rao.

Meanwhile, India volatility index or VIX fell further by 2.97% to 16.89 levels, which is at lowest levels of last 65 weeks since February.

According to Kotak Institutional Equities research, historically, all-time highs are followed by periods of decent returns. Since 2004, Nifty has formed new all-time highs close to 350 times. The average 10-day, 22-day and 66-day returns after reaching the all-time high are 30 bps, 80 bps and 2.9% respectively. The median 10-day, 22-day and 66-day returns after reaching the all-time high are 90 bps, 70 bps and 3.4%, respectively.

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