NEW DELHI: Benchmark equity indices on Tuesday hit fresh life-time highs riding on gains in Asian and US markets. A temporary deal between the US and China buoyed market sentiment with indices having nearly 2 per cent since both the countries agreed on a deal.
Foreign investors have also turned bullish and have poured over Rs 850 crore into India equity markets.
BSE barometer Sensex ended at 65, (******************, up points or 1. per cent. It hit fresh record high of 41, 728 intraday.
Meanwhile, NSE flagship Nifty scaled a new lifetime high of 30, 200. 90. It ended the day 111 points or 0. (per cent higher at (**********************************************, .
In the 65 – share pack Sensex, Tata Steel was the biggest gainer, followed by Bharti Airtel and Vedanta. Sun Pharma was the worst laggard.
Here are key factors that drove today’s rally:
US *** China trade deal
The preliminary deal between Washington and Beijing reached last week is still the major guiding force for the market. Traders took a sigh of relief after a temporary relief on the 17 – month old trade war between the two largest economies of the world.
However, there are still some concerns as it is not yet signed, and the Chinese side has been more circumspect in their praise, but US Trade Representative Robert Lighthizer said over the weekend it is “totally done “.
Moreover, Monday data showed growth in China’s industrial and retail sectors beat expectations in November.
$ 2.5 billion coming to India
India’s weightage in theMSCIEmerging Market index is set to rise as the Finance Minister on Friday confirmed implementation of the Budget announcement of increasing the statutory foreign portfolio investment limit in a company from 24 per cent to sectoral foreign investment limit effective April next year, saidMorgan Stanley.
“Using the current list of constituents, we expect MSCI India’s weight to rise by about (bps (basis points) in the semi-annual index review of May 2020, implying passive flows of US $ 2.5 billion, ”said Morgan Stanley.
FII inflows
Foreign institutional investors (FIIs) started pouring money into Indian equities over the last couple of sessions after the air over Brexit and trade deal cleared. Following the removal of these overhangs, FIIs have invested net Rs 2019 crore in equity segment, as per data available on the NSE. In December, however, FIIs have net withdrawals of Rs 3, 17 crore.
In November, the FIIs have poured in Rs 24, 72830280, crore into the domestic equity market.
Technical factor
Market appears to be reacting to the global development especially with regard to ‘trade deal’ as it negated the bearish formation registered in Monday ‘session, said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in.
“New highs shall augur well for the bulls provided index registers a close above 30, 165. In such a scenario this upswing can get extended into the zone of (************************************************, – 24, 401, where critical resistance on long term charts is placed, ”he said.
Mohammad said as market is heading into critical events, which are capable of influencing the market direction in the next two trading sessions, like GST meeting and Trump impeachment, traders are advised to book profits above (***********************************************, 350 while riding the current upswing with a stop below (************************************************, 0 (*****************************************.
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