Stock market bulls on Thursday tightened their grip with the benchmark Sensex closing at a new record high 36,548.41 as crude oil prices softened, trade tension between US and China appeared to ease and global markets and currencies gained ground.
The 30-share Sensex surged 282.48 points to end at 36,548.41, while the broader NSE Nifty reclaimed the crucial 11,000-level to close at 11,023.20 with a 75-point gain. After a strong opening, the Sensex gathered momentum to touch an all-time intra-day high of 36,699.53 on sustained buying by domestic and foreign investors, but gave up part of the gains. Reliance Industries spurted 4.42 per cent to hit its all-time closing high, re-entering the $100 billion market capitalisation club. TCS had recently crossed the $100 billion market cap level.
The rupee also surged by 20 paise to end at a one-week high of 68.57 against the US dollar buoyed by a steep fall in crude prices and a strong rally in equity markets. The forex market witnessed a revival in sentiment after crude prices plunged the most in two years on supply glut worries after Libya said its four oil export terminals were reopening, ending a standoff that had closed most of its oil output. The benchmark Brent crashed over 7 per cent on Wednesday before regaining some lost ground in early Asian trade at $74.80 a barrel. Brent crude oil gained 59 cents a barrel to trade at $74 by 1746 GMT.
According to analysts, sustained buying by domestic and foreign institutional investors and an encouraging start to the earnings season spurred buying momentum. The Sensex has now surpassed its previous record closing of 36,283.25 hit on January 29. The index also gained 973.86 points in five sessions.
“Markets maintained its upward streak in expectation of earnings growth and decline in oil prices. Besides, the prospects of trade talks between the US and China influenced global peers to rebound after the recent sell off. “Oil price declined to recent low while rupee appreciated easing the concern of an expected rise in June CPI inflation to 5.29 per cent,” said Vinod Nair, Head of Research, Geojit Financial Services. Investors are optimistic about the corporate earnings with TCS posting a 23.5 per cent rise in net profit for the June quarter of fiscal 2018-19.
Manoj Sachdeva, research head, Hem Securities, said: “Equity benchmarks traded on strong note throughout the day and ended the session with modest gains after tracking firmness in Asian cues. Key indices opened on an upbeat note despite lingering concerns regarding escalating US-China trade war during previous session.”
Shares of oil marketing and airline companies gained up to 4.7 per cent after crude oil prices posted their biggest one-day drop in two years. InterGlobe Aviation surged 4.70 per cent, SpiceJet rose 2.72 per cent and Jet Airways (India) gained 1.80 per cent on the BSE.
Asian stocks and commodities recovered despite uncertainties over trade concerns. Shanghai Composite Index rose 2.16 per cent, Hong Kong’s Hang Seng gained 0.60 per cent, while Japan’s Nikkei closed 1.17 per cent higher. In the Eurozone, Frankfurt’s DAX rose 0.58 per cent and Paris CAC gained 0.65 per cent in their late morning deals. London’s FTSE too gained 0.73 per cent. US stocks, however, fell on Wednesday amid renewed tensions over global trade and geopolitics.
While markets welcome the lull in the escalation of trade tensions, they are likely to remain on edge as they await a potential reprisal from Beijing to US President Donald Trump’s latest volley. Investors concerns have overshadowed economic data hinting that global growth is on track as well as the start of earnings season.