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Sensex rallies 175 points to hit record high, Nifty tests 12,100; Kotak Bank top gainer, Sun Pharma sheds nearly 2%

FP Staff

Market benchmark BSE Sensex jumped over 175 points to hit its record high of 41,185.03 in opening session on Monday tracking global euphoria over the US-China trade deal. After starting significantly higher, the 30-share index pared gains to trade 15.33 points or 0.04 percent up at 41,025.04. Similarly, the broader Nifty was trading 5.75 points or 0.05 percent up at 12,092.45, PTI report said.

Kotak Bank was the top gainer in the Sensex pack rising up to 2.01 percent, followed by HCL Tech, Tech Mahirdra, TCS, Bajaj Auto and SBI.

On the other hand, Sun Pharma was the top loser, shedding up to 1.57 percent. Yes Bank, HUL, ITC, Bajaj Finance and Axis Bank were also trading in the red.

In the previous session, the 30-share gauge ended 428 points, or 1.05 percent, higher at 41,009.71, while the Nifty settled 114.90 points, or 0.96 percent, higher at 12,086.70.

On a net basis, foreign institutional investors bought equities worth Rs 115.70 crore, and domestic institutional investors purchased shares worth Rs 384.92 crore, data available with stock exchange showed on Friday.

According to traders, an agreement between the US and China over trade tariffs has enthused global investors.

The two countries have reached a historic agreement on a phase one trade deal reaching a big breakthrough in the over 18-month-long bruising trade war between the world's two largest economies that threatened to roil the global economy.

Back home, market participants are eyeing announcement of wholesale inflation later in the day, traders said.

Rupee appreciates 8 paise

The Indian rupee appreciated by 8 paise to 70.75 against the US dollar in early trade on Monday as easing crude oil prices and positive developments on the US-China trade talk front strengthened investor sentiments.

Forex traders said the weakening of the US dollar vis-a-vis other currencies overseas also supported the rupee.

At the interbank foreign exchange the rupee opened at 70.80, then gained further ground and touched a high of 70.75, registering a rise of 8 paise over its previous close.

On Friday, rupee had settled for the day at 70.83 against the US dollar.

The domestic unit, however, could not hold on to the gains and was trading at 70.80 against the dollar at 0940 hrs.

US President Donald Trump on Friday said that the US and China have reached a historic agreement on a phase one trade deal.

The phase one of the trade deal requires structural reforms and other changes to China's economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.

It also includes a commitment by China that it will make substantial additional purchases of US goods and services in the coming years.

Forex traders said higher opening in domestic equities and foreign fund inflows also supported the local unit, while weak macroeconomic numbers weighed on the domestic unit and restricted the upmove.

Rising food prices pushed the retail inflation in November to over three-year high of 5.54 percent, while the industrial sector output shrank for third month in a row by 3.8 percent in October.

Finance Minister Nirmala Sitharaman on Friday promised more stimulus measures for sectors of the economy in distress as she counted on steps taken till now to boost growth by driving up consumption.

Asian shares up as 'phase one' trade deal boosts confidence

Asian shares moved higher on Monday as investors welcomed a trade agreement between Beijing and Washington over the weekend, but enthusiasm was capped by lingering scepticism about the deal and ongoing relations between China and the United States, according to Reuters.

US Trade Representative Robert Lighthizer on Sunday said a deal was "totally done", notwithstanding some needed revisions, and would nearly double US exports to China over the next two years.

That helped push the MSCI's broadest index of Asia-Pacific shares outside Japan, which had touched its highest level since April 24 on Friday, up 0.27 percent.

Australia's S&P/ASX 200 led the way as it jumped 1.24 percent, while shares in Taiwan and South Korea added about 0.1 percent.

But Chinese investors had a more tepid reaction, pulling the benchmark Shanghai Composite index down 0.16 percent as investors took profits following a 1.8 percent gain on Friday.

The small decline came despite data showing the country's industrial output growth and retail sales jumped more than expected in November.

Japan's Nikkei 225 also succumbed to profit-taking, easing 0.14 percent after surging 2.55 percent to a 14-month closing high on Friday.

The "phase one" agreement suspended a threatened round of US tariffs on a $160 billion list of Chinese imports that were scheduled to take effect on Sunday. The United States also agreed to halve the tariff rate, to 7.5 percent, on $120 billion worth of Chinese goods.

Ryan Felsman, senior economist at CommSec in Sydney, said the deal was a positive factor in the market, but investors awaited further details. The reduction in US tariffs may have also disappointed some investors looking for more aggressive action, he added.

"Certainly there were expectations perhaps that the rollback would be more significant than just 50 percent," he said.

The 17-month-old trade dispute has between the world's two largest economies has roiled financial markets and taken a toll on world economic growth.

"The announcement is a step in the right direction for the two nations, but does not completely reduce the chances of trade disputes between the two nations in the year," ANZ analysts said in a morning note.

US shares had struck a cautious note on Friday, paring initial gains to end barely higher as weary investors awaited signs of a concrete deal.

However, the news of a deal was still enough to send the S&P 500 to a record closing high of 3,168.8, up 0.01%. The Nasdaq Composite added 0.2 percent to end at 8,734.88, also a record, and the Dow Jones Industrial Average rose 0.01 percent to 28,135.38.

US Treasury yields moved higher on Monday, reflecting a more positive mood. Benchmark 10-year Treasury notes rose to 1.84 percent compared with its U.S. close of 1.821% on Friday and the two-year yield touched 1.6201 percent compared with a US close of 1.604 percent.

The dollar was flat against the yen at 109.36 and the euro was up 0.07% at $1.1128. Sterling, which jumped last week after the UK general election produced a strong Conservative majority, gained 0.29 percent to $1.3363.

--With inputs from agencies

Also See: Sensex, Nifty edge higher as easing trade tensions spur risk appetite; Tata Motors rallies nearly 4%, Bharti Airtel in red

Sensex drops 33 points in early trade, Nifty low; IT, auto stocks take a beating amid fresh infusion of funds

Benchmark equity indices edge up in early deals on positive global cues; state-owned banking stocks lead gains

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