The benchmark Bombay Stock Exchange (BSE) index ended at a fresh peak of 54,493 points on Thursday, up 0.2%, building on record market closes on Tuesday and Wednesday. The index rose 1.02% on Wednesday to end at 54,392.20 points, and was up by 1.65% to 53,823.36 points on Tuesday.

HDFC Bank rose 8.13%, telecom operator Bharti Airtel rose 5.6%, and IT firm Tech Mahindra rose 3.21% in the past three days, emerging as some of the biggest winners of the surge.

“There are multiple links to the rally,” says Vinay Khattar, head of research at Edelweiss Wealth Management. “One is the big liquidity flow that is happening across the world. And the second is we see demand picking up, and we see a very robust infrastructure trend.”

Spending by both the corporate sector and households is growing, Khattar says. The uptick in consumer spending is evident in higher home prices, which have been stagnant for about a decade. Residential property prices in eight of India’s largest cities rose by 2% to 5% in the April–June quarter year on year, Khattar says. Registration of new properties in the largest market of Mumbai hit 9,037 in July, the highest in a decade, according to a Knight Frank report.

Data published Tuesday showed that factory activity for manufacturing reached a three-month high of 55.3 in July, pointing to higher demand as Indian states have begun easing the lockdowns they imposed to check the spread of India’s devastating second COVID wave.

India reported 42,982 daily cases of COVID on Thursday, down from a peak of 414,188 on May 7. The virus has abated across the country, except in the southern state of Kerala, which has recorded half the country’s total cases for the past week.

Government collections of goods and services tax, a levy on most goods and services for domestic consumption, rose 33% in July to INR 1.16 trillion ($15.6 billion) from the same month a year ago, adding to sentiment that the economy is on the mend.

Foreign portfolio investors, some of whom became net sellers during the second COVID wave that stretched from March to June, have turned into net buyers with positive inflows this week.

Analysts say that the higher inflow by foreign funds appears to be a delayed reaction to a series of crackdowns by China on its tech sector.

Last Saturday, China’s State Council announced a broad overhaul of the education sector, which has barred certain companies from making a profit and going public.

China’s effort to rein in the edtech sector follows a government clampdown on homegrown Internet companies. 

The moves by China have come at a time when several Indian tech startups are looking to raise capital from the primary market. The rally in the secondary market has been led by tech companies, real estate, and metal stocks. 

“India—in comparison to China—is a more neutral geopolitical player and thereby a less risky and more preferred environment for global investors to park their money,” notes Iqbal Khan, partner of mergers and acquisitions, private equity, and general corporate at Shardul Amarchand Mangaldas & Co.

Analysts say that the stock market rally in India is likely to sustain unless there is a third wave of COVID or there are signs of an early end to global monetary easing. The Reserve Bank of India is due to review its monetary policy on Friday, but analysts expect the central bank to maintain easy liquidity conditions.