Four factors why Sensex, Nifty hit record highs today

While the Sensex touched an all-time high of 38,340 breaching the previous peak of 38,076 reached on August 9, Nifty crossed the 11,500 mark for the first time ever to hit a new high of 11,565 level. 

By BusinessToday.In  
Monday, August 20, 2018

The Sensex and Nifty scaled fresh peaks in trade today on gains in big cap stocks such as L&T, Tata Motors, ONGC and Reliance Industries. While the Sensex touched an all-time high of 38,340 breaching the previous peak of 38,076 reached on August 9, Nifty crossed the 11,500 mark for the first time ever to hit a new high of 11,565 level.  Nifty's previous record high stood at 11,495 points reached on August 9. Here's a look at factors which took indices to all time highs today.

US-China trade talks

The news of US, China trade talks fuelled expectations among market participants on the global stage that the two nations might find a way to resolve an escalating tariff war which could improve global market sentiments.

The lower level trade talks set to take place through Tuesday and Wednesday this week led to improvement in market sentiment. France's CAC 40 edged up nearly 0.6 percent in early trading to 5,377.10. Germany's DAX added 0.9 percent to 12,323.52, while Britain's FTSE 100 climbed 0.6 percent to 7,604.67. US shares were also set to drift higher with Dow futures adding 0.2 percent to 25,734. S&P 500 futures gained 0.2 percent to 2,858.70. The positive sentiment in world markets helped Indian markets scaling fresh all time highs in trade today.

Rupee recovery

The rupee opened strong against the dollar rising 32 paise to 69.83 in trade today from previous close of 70.15. It further rose to 69.69 level in afternoon trade strengthening market sentiment. The currency closed at 69.82 level today compared to closing level of 70.15 level on Thursday.

FII inflows

FIIs became bullish on markets this month by pouring over Rs 7500 crore into the Indian market on better show in Q1 corporate earnings and lower crude oil prices. During April to June, FIIs had pulled out Rs 61,000 crore from Indian markets, according to a PTI report.

Strong June quarter earnings

June quarter earnings of India Inc came out strong which buoyed market sentiment.

Brokerage Motilal Oswal in an earnings review report said, "The proportion of companies reporting 30% plus profit after tax growth (at 41% of MOSL Universe) is the highest since March 10, partly aided by the low base of 1QFY18 in several consumption-oriented sectors. Aggregate sales of MOSL Universe grew 22.9% YoY, at a 25 quarter high (estimate of 22.2%), EBITDA rose 19.3% YoY (estimate of plus 23.5%) and PAT increased 13.8% YoY (estimate of plus 25.2%).

Performance was disproportionately impacted by corporate banks. Excluding corporate banks, MOSL Universe sales/EBITDA/PAT grew 23.0%/21.1%/26.7% against estimate of 22.6%/24.1%/31.3%. Of the 19 sectors we track, two/eight /nine posted profits that were above/in -line/below our estimates. Capital goods and Retail universe posted profits ahead of expectations, while Autos, Banks, Life Insurance, Healthcare and Utilities missed expectations."

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