Nifty reclaims 10,850 level; five key factors that fuelled the rally

NEW DELHI: Domestic equities extended gains for a third consecutive session on Friday, backed by across the board buying following positive global cues.

Index heavyweights, including Sun Pharma, HDFC twins, Reliance Industries, ICICI Bank, L&T and ITC traded with gains.

Here’s a look at the key boosting market sentiment:


Strong global show
Asia stocks climbed on Friday after Wall Street settled in the positive territory amid signs of an ebb in the tussle between the White House and US Fed. Most US stock indices closed with gains on Thursday. China's SSE Composite Index and the Korea Composite Stock Price Index, or KOSPI, logged gains of half-a-percent.

Liquidity hopes
The Finance Ministry is readying to infuse Rs 28,615 crore in seven state-run banks by December end to help meet the regulatory norms on maintaining adequate capital buffers. The government last week sought Parliament’s approval for infusion of additional Rs 41,000 crore in state-owned banks through the second batch of supplementary demands for grants. That takes total recapitalisation for 2018-19 to Rs 1.06 lakh crore.

Capital inflows
Foreign portfolio investors (FPIs) bought net shares worth Rs 1,731.91 crore on Thursday. On the other hand, for the first time in two decades, India has been getting more foreign investment than its neighbour China. In 2018, India saw more than $38 billion of inbound deals compared with China’s $32 billion, buoyed by stable fundamentals, a bankruptcy code and fresh opportunities in sunrise sectors.

Strong rupee
The domestic unit gained muscle on Friday after the dollar eased against its global peers. The rupee was trading 43 paise higher to 69.92 against the US currency around 1:45 pm, aided by foreign fund inflows amid a weak dollar globally and sharp fall in crude oil prices.

Crude's fall
Oversupply concerns continued pressing crude oil in the global markets. Oil prices climbed by $1 to win back some of the ground they lost in the previous session, but growth in the US crude stockpiles and ongoing concerns about the global economy kept markets under pressure, Reuters reported. Crude's slide is no less than a boon for the Indian economy as it reduces the gap of current account deficit and fiscal deficit.