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Six factors why Sensex, Nifty rose to record highs today

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Six factors why Sensex, Nifty rose to record highs today

The Nifty ended above 11, 000 level for the first time since February 1 and is now 2% away from record highs. Sensex hit all-time high of 36,699 intra day after opening at 36,424 level.

The Sensex and Nifty ended at record highs amid upbeat investor sentiments and positive global cues on Thursday (July 12, 2018). While the Sensex closed at record high of 36,548 level, a rise of 282 points, Nifty rose 74 points at 11,023 level. Sensex hit all-time high of 36,699 intra day after opening at 36,424 level. The Nifty ended above 11, 000 level for the first time since February 1 and is now 2% away from record highs.

TCS which reached its all-time high of 1992 yesterday over strong Q1 earnings succumbed to profit booking and closed 0.43% lower to 1971 level.

However, market breadth was negative with 1153 stocks closing higher compared with 1496 ending in the red on BSE.

RIL effect

Reliance Industries was the top Sensex gainer after the stock re-entered the $100 billion market capitalisation club after October 2007.

Its market capitalisation rose to Rs 6,88,766 crore intra day on the BSE. The closing market capitalisation of the firm stood at Rs 6,85,725 crore.

The Reliance stock rose to its intra day high of 1098 level, a rise of 6.02% from previous close. The stock opened at 1043 level in trade today higher than the previous close of 1036.35 level on the BSE.

The Reliance Industries stock was the top volume gainer with 13.70 lakh shares traded on the BSE amounting to Rs 148.02 crore in turnover.

The stock ended 4.42% or 45 points higher at 1082.20 level on the BSE.

Other Sensex gainers were Wipro (2.44%), L&T (1.94%) and HDFC (1.74%).

Banking stocks

Banking stocks led the gains with the BSE bankex rising 0.92% or 272 points to 29,959 level. The index touched 30,120 level intra day. The BSE bankex was the top gainer among sectoral indices.

Bank Nifty too rose 210 points to 27,026 level. It hit an intra day high of 27,164 level. The index is up 5.82% since the beginning of this year.

Crude oil price play

Crude oil prices fell after Libya said it would raise supply amid cap on demand seen on US-China trade tensions. Brent crude oil prices crashed 6.9% to two-year low level to close at $73.40 a barrel for the global benchmark.

US crude oil prices too fell 5% to $70.38 a barrel - their worst one-day fall in a year.

The fall follows a months-long rally that saw oil prices rising to record highs in recent years.

Reacting to the positive development, stocks of IndiGo operator InterGlobe Aviation, Jet Airways and SpiceJet closed higher.

While the InterGlobe Aviation stock closed 4.70% or 50 points higher at 1,124 level, the SpiceJet stock was up 2.72% to 113 level on BSE.

The Jet Airways stock which rose over 5% intra day closed 1.80% higher at 344 level.

Meanwhile, shares of Bharat Petroleum Corp (2.61%) and Hindustan Petroleum Corp (1.53%) and Indian Oil Corp (1.10%) too closed higher amid fall in international crude oil prices. Subsequently, oil and gas stocks took the Sensex and Nifty higher with the BSE oil and gas index among the top gainers with a close of 222 points or 1.60% at 14152 level.

Optimism over Q1 earnings

Stocks rose higher today amid optimism over Q1 earnings of the curremt fiscal. TCS which delivered strong earnings in Q1 hit a lifetime high on bourses yesterday. IndusInd Bank too posted a 24 per cent rise in net profit at Rs 1,035.72 crore for the quarter ended June 30 which led to a rise

A Crisil report said India Inc will deliver the highest quarterly revenue growth in three years at 12.8 per cent in the April-June period, but high oil prices will narrow profit margins by 0.20 per cent.

Crisil Research's senior director Prasad Koparkar said 15 of the 21 key sectors will report a double digit growth for Q1FY19 and volume pick-ups are expected both from both the consumption and commodity-linked sectors.

Volume growth will lead to automobiles, retail and airline services to log a revenue growth in excess of 15 per cent, it said.

Rupee factor

Meanwhile, the rupee firmed up by 19 paise to 68.58 against the dollar in early trade, improving sentiments on the street.

The currency closed at 68.57 level.

Global markets

Global stock markets rose on Thursday following Wall Street's decline amid US-Chinese trade tensions and oil prices recovered some of the previous day's steep losses.

In early trading, London's FTSE 100 rose 0.4 percent to 7,625.79 and Germany's DAX added 0.2 percent to 12,448.09. France's CAC 40 gained 0.2 percent to 5,366.25. On Wednesday, the CAC 40 and DAX both lost 1.5 percent while the FTSE 100 was off 1.3 percent. On Wall Street, futures for the Dow Jones industrial average and Standard & Poor's 500 index both were up 0.4 percent.

The Shanghai Composite Index rose 2.2 percent to 2,837.66 and Tokyo's Nikkei 225 gained 1.2 percent to 22,187.96. Sydney's S&P-ASX 200 advanced 0.9 percent to 6,268.30. Hong Kong's Hang Seng gained 0.7 percent to 28,517.61 and Seoul's Kospi added 0.2 percent to 2,285.06. Benchmarks in Taiwan and Southeast Asia also advanced, while New Zealand declined.