The stock markets on Friday joined a global market rally on reports that a trade deal has been agreed in principle between the US and China and Boris Johnson’s win in UK general elections will give more clarity to the Brexit plan of the UK. Despite the rise in inflation and contraction in the industrial growth, the Sensex soared 428 points to close above the 41,000-mark on across the board buying.
After hitting a high of 41,055.80 points, the 30-share BSE Sensex ended 428 points, or 1.05 per cent, higher at 41,009.71. Similarly, the broader NSE Nifty settled 114.90 points, or 0.96 per cent, higher at 12,086.70.
Indian markets factored in deal
Indian markets have largely factored in the US-China deal. It’s expected to neutralise the bad news on the domestic economic front in the near term. If the Brexit deal is also settled amicably, it will further boost Indian markets. However, going forward, stocks will have to take into account the domestic macros.
Analysts said markets shrugged off weak macroeconomic numbers released post market on Thursday and ended in the green on positive global cues. As per government data, rising food prices pushed the retail inflation in November to over three-year high of 5.54 per cent, while the industrial sector output shrank for third month in a row by 3.8 per cent in October.
Before the trade deal news came to light, share indices in Shanghai, Hong Kong, Seoul and Tokyo soared up to 2.57 per cent. Stocks in Europe also traded significantly higher.
Meanwhile, Wall Street fell in volatile trading on Friday, as investors remained confused about signs of progress on a US-China trade deal despite comments from both sides that they had arrived at an initial agreement.
All three major stock indices hit fresh record highs earlier in the session as Beijing said it had agreed on the context of a trade pact with Washington, but turned lower after comments that a deal had not yet been formally signed.
“At this point, I don’t think we know what we know about the deal … so markets are going to pause, and wait and see,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
US investors also missed out on a global rally fueled by a landslide victory for British Prime Minister Boris Johnson.
At 11:32 am ET the Dow Jones Industrial Average was down 78.19 points, or 0.28 per cent, at 28,053.86, the S&P 500 was down 9.28 points, or 0.29 per cent , at 3,159.29 and the Nasdaq Composite was down 9.94 points, or 0.11 per cent , at 8,707.38. The S&P index recorded 71 new 52-week highs and one new low, while the Nasdaq recorded 89 new highs and 34 new lows.