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Last Updated : Aug 17, 2018 01:38 PM IST | Source: Moneycontrol.com

These top 5 factors drive Sensex 300 pts higher, Nifty near 11,500

All sectoral indices are in the green with Nifty Bank, Metal, Pharma, FMCG and Auto indices rising 1-2 percent.

Moneycontrol News @moneycontrolcom

Bulls have taken a front foot on Dalal-Street after fighting with bears for last few sessions as the Sensex rallied 300 points to trade near psychological 38,000-mark on Friday, driven by broad-based rally.

The 50-share NSE Nifty is inching towards 11,500-levels, up 89.30 points at 11,474.30, while the broader markets are also participated in the rally with Nifty Midcap index climbing nearly a percent on strong market breadth. About three shares advanced for every single share falling on the NSE.

The rally after consolidation in last few sessions is driven by easing of trade war concerns, stability in the rupee, fall in oil prices and positive global cues.

All sectoral indices are in the green with Nifty Bank, Metal, Pharma, FMCG and Auto indices rising 1-2 percent.

Here are top five factors which are driving this rally:

Global Markets

Asian markets traded mostly higher today, following positive lead from Wall Street and positive newsflow on US-China trade war front.

Japan's Nikkei jumped over 2 percent followed by Hong Kong's Hang Seng (up 0.5 percent), Australia's ASX 200 (0.2 percent) and South Korea's Kospi (0.37 percent). However, only China's Shanghai Composite traded half a percent lower.

US markets on Thursday ended higher with Dow Jones rising 1.6 percent (the biggest jump since April). S&P 500 gained 0.8 percent and Nasdaq Composite rose 0.42 percent.

Trade War Fears Ease

Investors looked hopeful that the world's two largest economies can solve an ongoing trade spat, especially after the positive news flow from the Trump administration on US-China trade war front.

On Thursday, White House economic advisor Larry Kudlow confirmed that the US would hold a fresh round of trade talks with China later in August.

The fresh round of trade talks gave investors hope that concerns like slowdown in global growth and corporate profits may not take place.

The US and China have been engaged in a trade war recently as the US slapped tariffs on Chinese imported goods while China has also retaliated with tariffs on US goods.

Rupee Stabilises

The Indian rupee on Thursday ended at record closing low of 70.15 against the US dollar amid global currency depreciation and strong demand to the dollar on growing US economy.

Rising concerns over widening trade deficit also caused pressure on the rupee. It hit 70.40 to the dollar intraday and remained under pressure on Thursday despite recovery in Turkish lira after Qatar pledged USD 15 billion in investments to help the Turkey's economy.

Forex and money markets are closed today on account of 'Parsi New Year'. So there is some stability to the currency and as a result supportive to equity.

Sachin Shah Fund (Portfolio) Manager at Emkay Investment Managers said if the rupee stabilises here then he is not overly worried on the currency and entire inflationary trend.

Oil Price falls

Oil prices fell today, with US crude heading for a seventh weekly decline amid increasing concerns about slowing global economic growth that could hit demand for petroleum products.

Brent crude oil futures were down 0.07 percent to $71.38 a barrel and US West Texas Intermediate (WTI) crude futures dropped 0.05 percent to $65.43 a barrel.

Brent is heading for a 2 percent decline this week, a third consecutive weekly drop. WTI is on track for a seventh week of losses, with a fall of more than 3 percent, reports Reuters.

Technicals

The markets are heading towards positive close and seem to be forming a bullish candle on the daily charts today after bearish candle seen in previous session.

The Nifty50 is few points away from its all-time high of 11,495.20 touched on August 9. Today's intraday high is 11,480.25.

The Options data also indicated that 11,500 continued to be near term resistance and 11,000 to be strong support. On Thursday, 11,500 strike price added the highest contracts (42.09 lakh) in open interest followed by 11,600 which added 34.63 lakh contracts.

"Any strength on upside shall initially take the indices towards 11,500 mark and unless a fresh breakout is registered above this critical resistance point further upsides shall not be expected," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
First Published on Aug 17, 2018 01:38 pm
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