Home Market Nifty hits all-time closing high: 5 key factors that drove the rally

Nifty hits all-time closing high: 5 key factors that drove the rally


NEW DELHI: Bulls made a splendid comeback on Dalal Street on Friday that saw benchmark indices logging solid gains. The S&P BSE Sensex rallied 284.32 points or 0.75 per cent to 37,947.88 while the broader Nifty50 index closed at a lifetime high of 11,470.75 after rising 85.70 points or 0.75 per cent.

Here's a look at the key factors that fuelled market rally in today's trade:

US-China look to bury the hatchet
According to news reports, negotiators from Washington and Beijing will meet later this month in the first publicly announced meeting in weeks on their bitter trade dispute, which has seen both sides impose reciprocal tariffs on goods worth $34 billion. The news helped global markets regain composure after several days of volatility induced by Turkey's financial crisis and US-China's trade conflict.

Heavy buying in metals, FMCG and banking stocks
Investors lapped up stocks from metals, FMCG and PSU banks counters. At the time of writing this report, the Nifty PSU bank index was trading 3.15 per cent higher at 3,226, with all 12 constituents in the green. ITC, ICICI Bank, SBI and HUL contributed the most to Sensex's rise.

Foreign inflows rise
Foreign inflows in August stood at Rs 2,400 crore so far this month, higher tha Rs 2,264 crore seen in the entire month of July. Buying is seen even as there are concerns over EM selloff amid weakening macro environment and US-Sino trade tensions.

Lira firms despite US warning of more sanctions
The Turkish lira strengthened against the dollar on Friday as investors weighed up a US warning that Turkey should expect more economic sanctions unless it hands over detained American pastor Andrew Brunson. At 0656 GMT the currency stood at 5.7700 to the dollar, firming 0.7 per cent from a close of 5.8150, Reuters reported.

Experts see India as a bright spot among EMs
Despite a slew of headwinds on the global front, India is the most resilient among EM peers, feel D-Street experts. Indias macros are better than other emerging markets and Prime Minister Narendra Modi is in a strong position.Modi has built incredible credentials for his government, said Russell Napier, independent investment strategist & co-founder of ERIC.

This apart, Citi during its Asia FII Roadshow recently noted that India retains its distinct identity in the emerging market pool as investor interest shows a clear pick-up. Citi noted that select EM investors are looking at India as a safe haven in the volatile EM universe.

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