Market hits record high; factors which propelled markets higher

The BJP’s big win in three Hindi Heartland states propelled the Indian stock market which opened higher on December 4, with the benchmark Nifty50 and Sensex scaling new highs.

At 10:28 AM, Sensex was up over 900 points at 68,525 and the Nifty jumped over 250 points near 20,600. The Sensex scaled a lifetime high of 68,587.82, while the Nifty hit a new all-time high of 20,602.50 soon after market opened. All sectors also traded in the green.

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Here are some key factors that propelled the strong rally:

BJP’s big victory

Dalal Street gained momentum and reached a record high after the Bharatiya Janata Party got a clear mandate in the three major northern states of India. 

The BJP’s strong sweep showing the Rajasthan, Madhya Pradesh and Chhattisgarh, which were among the five states to vote for a new assembly in the previous month in three out of the four key states, allayed some concerns of more fiscal populism and political risks, ushering momentum across the market.

Asian Markets trade mixed

Asian shares were trading mixed in trade on December 4. Japan’s Nikkei was down 0.47 percent at 33,275.71 while Hang Seng shed 0.61 percent. However, buying was seen in Kospi which added 0.54 percent and was trading at 2,519.08 level.

US bond yield trade lower

Treasury yields hit multi-month lows last week after a US Federal Reserve official made fresh hints of interest rate cuts. 

Meanwhile, the two-year yield hit its lowest since mid-July at 4.6 percent and the benchmark 10-year yield fell its lowest since September at 4.23 percent.

FII remain net buyers

FIIs bought Indian shares worth Rs 1,589 crore on Friday on a net basis. Domestic institutional investors sold shares worth Rs 1,448 crore.

On the other hand, FIIs also snapped a two-month selling streak in November, adding stocks worth Rs 9,001 crore.

Oil below $80 per barrel

Oil futures reversed course after rising briefly on Monday amid persistent pressure from the OPEC+ decision and uncertainty over global fuel demand growth, although the risk of supply disruptions from the Middle East conflict limited the losses.

Brent crude futures were down 0.6 percent, or 49 cents, to $78.39 a barrel by 0406 GMT. US West Texas Intermediate crude futures were at $73.65 a barrel, down 0.6 percent, or 42 cents.

Rupee rises against the US dollar

The rupee appreciated 6 paise to 83.27 against the US dollar amid a positive trend in domestic equities and foreign fund inflows.

At the interbank foreign exchange, the rupee opened at 83.28 against the dollar. It touched a low of 83.30, and a high of 83.27 against the greenback.

_{Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as investment or trading advice. The author is not a financial advisor and does not have any professional qualifications in this area. The author does not guarantee the accuracy or completeness of the information provided. Any action you take based on the information in this blog post is done at your own risk. Please consult with a financial advisor before making any investment decisions.}