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Last Updated : Nov 26, 2019 07:57 AM IST | Source: Moneycontrol.com

Sensex at all-time high! Here are 6 key factors that fueled the rally in the market

The BSE Sensex registered record closing at 40,889.23, up 530 points, or 1.31 percent, while the Nifty ended 159 points, or 1.34 percent, up at 12,073.75.

Healthy across-the-board buying lifted market benchmark Sensex to its fresh all-time high of 40,931.71 while the NSE Nifty also traded above 12,050-mark on November 25.

The Sensex vaulted 572 points and Nifty added 170 points in intraday trade, with HDFC, Bharti Airtel, Axis Bank, Reliance Industries and Kotak Mahindra Bank among the top contributors.

The BSE Sensex registered record closing at 40,889.23, up 530 points, or 1.31 percent, while the Nifty ended 159 points, or 1.34 percent, up at 12,073.75.

Close

Only ONGC and Yes Bank failed to close in the green in the 30-share Sensex pack, both falling about 2 percent.

Bharti Airtel led the pack of Sensex gainers, followed by Tata Steel, IndusInd Bank, Axis Bank and HDFC.

Market breadth favoured gainers as the advance-decline ratio stood at 3:2.

BSE Midcap index closed 1.17 percent up and the Smallcap index finished 0.81 percent higher.

Among the sectoral indices, BSE Telecom surged 6.78 percent, followed by Metal (up 3.34 percent), Realty (up 2.04 percent) and Basic Materials (up 2.02 percent). All sectoral indices ended in the green.

Here are the top six triggers that fuelled the rally:

The US-China trade deal hopes: The hopes of a trade deal between the world's two largest economies gave a leg up to the market sentiment.

As per Reuters, on Saturday, US national security adviser Robert O’Brien said an initial trade agreement with China is still possible by the end of the year, though he warned Washington would not turn a blind eye to what happens in Hong Kong.

Media reports suggested that China has agreed to raise penalties on violations of intellectual property rights to address one of the sticking points in trade talks with the US.

Short-covering before F&O expiry: Experts suspect the rally in the market could be because of short-covering ahead of the F&O expiry on Thursday. "This appears to be short-covering ahead of F&O expiry. Postive global sentiment is also at play," said Rusmik Oza, Head of Fundamental Research at Kotak Securities.

Rally in global stocks: Positive global sentiment extended to the Indian market as major global markets traded with healthy gains. Among the Asian peers, China's, Japan's and Korea's key indices jumped by a percent.

Broad-based buying: Unlike the trend of the past few sessions, when the market rose due to support from select heavyweights, the market witnessed an across-the-board buying.

Investors bought in all sectors in the light of positive global sentiment. Telecom, metal, auto, bank and realty stocks witnessed strong traction.

FPIs appear bullish: FPIs appears to be positive on emerging markets such as India.

"FIIs are preferring emerging markets such as India as the recent easy monetary stance of Fed and ECB has improved liquidity in world markets. Besides, India’s economy is seeing a demand revival, especially in auto and consumer durables sectors. The government providing relief to telecom companies over spectrum-related dues and impending price increase planned by players have revived interest in the telecom sector," said Sandeep Nayak, ED & CEO of Centrum Broking.

Technical indicators: Nifty breached the key resistance at 12,000. Experts suggest the market looks ripe to scale new highs.

"Nifty was stuck in a narrow range of 12,000-11,800 and the consolidation has broken out on the upside today. On Friday last week, the index had taken support near the 20-DMA. The key short term moving average indeed turned out to be strong support and pushed the bulls to stretch their arms," said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas.

"On the higher side, the index has reached the daily upper Bollinger Band and is now stone’s throw away from the all-time high of 12,103. Once the index gets into the uncharted territory, 12,270-12,300 will be the subsequent target area to watch out for. 12,030-12,000 will now act as an immediate support zone," Ratnaparkhi said.

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First Published on Nov 25, 2019 02:38 pm
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