The BSE Sensex on Thursday ended at a record closing high of 39,832, ahead of the swearing in of the new Union Cabinet. The Sensex advanced by 329.92 points, or 0.84 per cent, while the Nifty also advanced by 84.80 points, or 0.71 per cent, to 11,945.90.

“In expectation of a growth agenda by the government, the market is building hope for new measures and spending in the final budget,” said Vinod Nair, Head of Research, Geojit Financial Services.

“Investors’ confidence are up despite high valuation as the liquidity issue will ease with a cut in interest rates in the monetary policy,” Nair added.

Epic Research Chief Executive Mustafa Nadeem said although the appointments for four key departments - Home, Defence, External Affairs and Finance - would have an impact, but as far as the markets are concerned a lot would also depend on sectors such as power, energy, infrastructure and transportation.

Indian Prime Minister Narendra Modi will take his oath of office on Thursday along with his ministers, including for the first time the powerful chief of his ruling Hindu nationalist party that just won a landslide victory in a general election.

This week, two major industrial bodies called on the new government to take steps to bolster the economy, which grew 6.6% in the three months to December - the slowest in five quarters.

Modi pushed through reforms such as a goods and services tax and a bankruptcy law in his first five-year term, but faced criticism for failing to create enough jobs for people entering the job market, weak farm prices and tepid growth.

india’s main opposition Congress party is trying to pick up the pieces after its second straight general election defeat.

India probably lost its spot as the fastest growing major economy to China in the January-March quarter as a chill in domestic and global consumer demand hit manufacturers and service providers.

The slowing economy didn’t stop voters giving Prime Minister Narendra Modi a landslide victory in an election concluded earlier this month.

But it puts an onus on him to deliver reforms that can truly unlock growth, which had waxed and waned during his first five years in office.

A Reuters survey of economists forecast growth slipped to 6.3% annually in the three months ending in March, its slowest pace in six quarters.

If they are right, India would lag China, which notched 6.4 pct growth in the March quarter, for the first time in one-and-a-half years.

Modi will be sworn in later on Thursday, and is expected to begin his second term by prioritising growth in an economy that isn’t creating enough new jobs for the millions of young Indians entering the labour market each month.

His first task could be finding a new finance minister, as Arun Jaitley has asked to step aside due to health reasons. Whoever takes Jaitley’s place will have to draw up a budget due to be presented in July.

The government is widely expected to deliver some fiscal stimulus while keeping the deficit at manageable levels. On the plus side, the Reserve Bank of India could have leeway to reduce interest rates as inflation remains subdued.

The gross domestic product data for January-March quarter and provisional estimates for the whole 2018/19 fiscal year ending in March will be released on Friday around 1200 GMT.

The RBI has lowered its economic growth forecast for 2019/20 fiscal year beginning April to 7.2%.

The central bank’s monetary policy committee (MPC), which has cut policy rates by 50 basis points this year, is expected to cut the repo rate by a further 25 basis points at its June 4-6 meeting, bringing it to 5.75%, the lowest since July 2010.

Retail inflation has stayed below 3 percent for last six months, possibly low enough to take the risk of cutting rates without waiting to seeing whether the monsoon rainy season starting next month holds any danger of a spike in food prices. Several indicators - automobile sales, rail freight, petroleum product consumption, domestic air traffic and imports indicate a slowdown in domestic consumption.

Corporate earnings hit a six-quarter low growth of 10.7% during January-March quarter on weakening consumer sentiment and softening commodity prices, ICRA, the Indian arm of the ratings agency Moody’s said on Tuesday, citing a sample of over 300 companies.

“The signs of slowdown in domestic demand are visible both in urban and rural areas,” Federation of Indian Chambers of Commerce and Industry said in a statement earlier this week, while submitting pre-budget demands to the finance ministry. Industry chambers have lobbied for a fiscal stimulus including a cut in corporate tax rates and lower interest rates.

Agencies