Sensex crosses 36,000, Nifty scales 11,000 for first time; 6 reasons why

India’s stock market made new all-time highs on Tuesday with benchmark indices Sensex and Nifty crossing the psychological levels of 36,000 and 11,000 for the first time in history of Indian capital markets. The S&P BSE Sensexamassed as much as 341.97 points or 0.96% to close at 36,139.98 and Nifty added 117.5 or 1.07% to conclude at 11,083.7 while Nifty Bank surged 1.27% to close at 27,384.5. Domestic markets started the day at record highs with Sensex and Nifty breaching the round figure levels of 36,000 and 11,000 within minutes of opening up of the market

During the day, the benchmark Sensex jumped 372.82 points to mark the all-time high of 36,170.83 whereas the 50-share barometer Nifty advanced 126.7 points to hit an intraday all-time high of 11,092.9. In the wee minutes of morning trades, Sensex surged heavily to breach the psychological level of 36,000 within four sessions when the key equity index crossed 35,000-mark on Wednesday last week. The domestic markets are on a continuous rising spree since about last 13 months with Sensex and Nifty making and breaking newer highs day after day.

We take a look at 6 factors that fuelled Indian markets to new highs today

IMF growth projections

International Monetary Fund projected that India could grow at 7.4% in 2018, as against China’s 6.8% making it the fastest growing country among emerging economies following last year’s slowdown due to demonetisation and the implementation of the GST. Notably, the International Monetary Fund has projected a 7.8% growth rate for India in 2019.

Continued FPI inflows

The FPIs (foreign portfolio investors) continued to inject money in the Indian capital markets. According to latest data available, FPIs have put in a whopping Rs 8,700 crore in the Indian capital markets in January up until Friday last week. This follows an investment of about Rs 2 lakh crore in the capital markets (equity and debt) in the entire 2017. “According to the depositories data, FPIs infused in a net amount of Rs 5,769 crore in equities and Rs 2,940 crore in the debt markets during 1-19 January—translating into a net inflow of Rs 8,709 crore,” PTI said in a report. Earlier yesterday only, FPIs bought equity shares worth Rs 1,567.51 crore on a net basis while DIIs (domestic institutional investors) sold equities to the tune of Rs 461.87 crore, according to the provisional data on the stock exchange.

Q3 earnings optimism

Investors seemed to have positive over the third-quarter corporate earnings as most of the blue-chip companies have reported better-than-expected Q3 results be it the market cap leader Reliance Industries or India’s second-largest IT firm Infosys. Going ahead in the holiday-shortened week ahead, Q3 earnings of Maruti Suzuki, Idea Cellular, Coal India, and Dr Reddy’s Laboratories along with derivatives expiry will likely to steer the domestic equities.

Heavyweights rally

On the back of above-mentioned factors, a value buying was seen in the shares heavyweight stocks of companies such as ICICI Bank, Infosys, State Bank of India, Reliance Industries, ONGC, IndusInd Bank, Tata Steel, HDFC, Axis Bank, L&T, Maruti Suzuki, and Coal India. Collectively these 12 stocks alone added 355.09 points to the benchmark Sensex out of the 341.97-point gain in the index. While, on the other hand, a marginal dip in shares of HDFC Bank, Tata Motors, TCS, Wipro and Asian Paints washed away 49.08 points.

Luster in metal stocks

Metal stocks surged the most in Tuesday’s trade with the benchmark Nifty Metal index rising as much as 162.85 points or 4.07% to end at 4,169 with stocks of Jindal Steel, JSW Steel and Vedanta surging 5-11%. Other metal stocks which also jumped phenomenally include SAIL, Hindalco, Tata Steel, NMDC, Coal India, NALCO, Hindustan Zinc and MOIL soaring 1-5%. The stocks of Jindal Steel, JSW Steel and Vedanta also hit their respective 52-week highs on Tuesday.

PSU Bank stocks on roll

PSU bank shares also went on a roll today with shares of heavyweight bankers such as State Bank of India, Punjab National Bank and Bank of Baroda advancing 3-6%. The benchmark Nifty PSU Bank index gained 146.45 or 3.97% to end at 3,831.95 with each and every underlying share finishing in green. Shares of Syndicate Bank, Indian Bank, Union Bank, Canara Bank, Andhra Bank, Bank of India, Allahabad Bank, Oriental Bank of Commerce and IDBI Bank rose 1-4% today.