Sensex hits record high! 6 factors driving the market today
The Nifty50 index of NSE reclaimed the psychologically important 9,500 mark on Thursday and it snapped a two-day losing streak to close the session in the green. The BSE Sensex ended over 400 points higher.
Shares from FMCG, realty, IT, capital goods, consumer durables, banking, technology, oil & gas, auto, PSU and metal sectors were buzzing in Thursday’s trade.
Going by the buzz on Dalal Street, here are the top factors that drove the rally in stocks.
Firm global cues
Asian equity markets scaled two-year highs on Thursday after the US Federal Reserve signalled a cautious approach to future rate hikes and reduction of its $4.5 trillion bond holdings. Hong Kong’s Hang Seng index advanced 0.8 per cent to its highest level since July 2015 while Taiwanese shares hit a 17-year high.
Fed rate hike less likely
Minutes from the US Fed’s last policy meeting showed the policymakers agreed they should hold off on raising interest rates until they were clear that the recent US economic slowdown was temporary, though most said a hike was coming soon. US stocks closed higher for the fifth straight day on Wednesday. Robust opening in European markets further supported the benchmark equity indices in afternoon trade.
Dragon’s downgrade minor blip
Day after the Moody's downgraded China’s debt rating on Wednesday, analysts said there is no reason to be pessimistic on China. “The credit downgrade was not a surprise after all, given the delay in structural reforms such as liberalisation of capital moves. The Chinese economy looks set to grow more than six percent, so there’s no reason to be that pessimistic either,” Reuters quoted an HSBC analysts as saying.
Short coverings
Thursday being the last session of May series futures and options contracts, some investors appeared to have rushed to cover their short positions, which further supported the bounce in the boarder market.
Stronger rupee
The domestic currency strengthened for the second day on Thursday, climbing 25 paise to 64.48 against the dollar on increased selling of the US currency by exporters and banks amid gains in the domestic equity market.
Robust institutional flows
Unabated inflows from foreign portfolio investors to equities and debt have been supporting the domestic markets in May. FIIs and DIIs have poured Rs 7,859 crore and Rs 15,963 crore in equity and debt, respectively, so far in May.
Shares from FMCG, realty, IT, capital goods, consumer durables, banking, technology, oil & gas, auto, PSU and metal sectors were buzzing in Thursday’s trade.
Going by the buzz on Dalal Street, here are the top factors that drove the rally in stocks.
Firm global cues
Asian equity markets scaled two-year highs on Thursday after the US Federal Reserve signalled a cautious approach to future rate hikes and reduction of its $4.5 trillion bond holdings. Hong Kong’s Hang Seng index advanced 0.8 per cent to its highest level since July 2015 while Taiwanese shares hit a 17-year high.
Fed rate hike less likely
Minutes from the US Fed’s last policy meeting showed the policymakers agreed they should hold off on raising interest rates until they were clear that the recent US economic slowdown was temporary, though most said a hike was coming soon. US stocks closed higher for the fifth straight day on Wednesday. Robust opening in European markets further supported the benchmark equity indices in afternoon trade.
Dragon’s downgrade minor blip
Day after the Moody's downgraded China’s debt rating on Wednesday, analysts said there is no reason to be pessimistic on China. “The credit downgrade was not a surprise after all, given the delay in structural reforms such as liberalisation of capital moves. The Chinese economy looks set to grow more than six percent, so there’s no reason to be that pessimistic either,” Reuters quoted an HSBC analysts as saying.
Short coverings
Thursday being the last session of May series futures and options contracts, some investors appeared to have rushed to cover their short positions, which further supported the bounce in the boarder market.
Stronger rupee
The domestic currency strengthened for the second day on Thursday, climbing 25 paise to 64.48 against the dollar on increased selling of the US currency by exporters and banks amid gains in the domestic equity market.
Robust institutional flows
Unabated inflows from foreign portfolio investors to equities and debt have been supporting the domestic markets in May. FIIs and DIIs have poured Rs 7,859 crore and Rs 15,963 crore in equity and debt, respectively, so far in May.