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India’s key benchmark index raced to a new closing high on Monday on investor hopes of another round of government stimulus measures and steady inflow from foreign institutional investors (FIIs).

The Sensex closed at 40,301.96, up 136.93 points. The 30-share index had touched a record closing high of 40,267.62 on June 3.

The Nifty closed at 11,941.30, up 50.70 points or 0.43% on Monday.

Some of the positive factors such as decent earnings season so far, better-than-expected festive sales, hopes of stimulus from the government and continued FII inflow helped improve sentiment, said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services Pvt. Ltd.

“On the global front as well – US market were at an all-time high, European and Asian markets over 6-month high on hopes of US-China phase one trade deal negotiation, strong US jobless data and better-than-expected China PMI data. While the markets consolidate near its peak, the positive momentum should continue for a while,” he said.

FIIs have bought a combined more than $2.06 billion in the last three sessions in domestic and bond markets. In the year so far, foreign investors have bought nearly $10.22 billion in Indian equities and $4.69 billion in debt.

Domestic institutional investors sold shares worth Rs692 crore in the last three sessions, but were net buyers worth Rs50,302.86 crore in the year so far.

According to media reports, the government is discussing the abolition of the dividend distribution tax (DDT), a review of tax slabs and a change in the holding period of assets to be eligible for tax savings. The securities transaction tax and the tax on long-term capital gains above Rs1 lakh introduced in the 2018 budget are also said to be under review.

Despite the current euphoric investor sentiment, analysts feel that the current slowdown will continue to persist. Centrum Broking Ltd said in analyses of “downturns” in the last two decades, the current slowdown seems to be the most protracted and severe both in terms of time and its spread. It added that impact on both rural and urban demand has been unprecedented. The brokerage believes the September quarter to be the bottom and that it takes on an average two-three quarters for an economy to normalise once government intervention starts.