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Sensex rallies 453 points: Top factors that drove the rally

Twenty-one of thirty Sensex stocks closed higher with RIL as the top gainer.

Updated: Oct 17, 2019, 05.59 PM IST
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The rupee rose as much as 30 paise against the greenback amid strong inflows from foreign institutional investors and fall in crude oil prices.
NEW DELHI: Benchmark equity indices Sensex and Nifty gained over 1 per cent on Thursday, taking their winning streak to five straight sessions, buoyed by gains in index heavyweight Reliance Industries (RIL) and banking and financial stocks.

Firm cues from global markets after Britain and the European Union struck an outline Brexit deal also helped the sentiment back home.

Markets at a glance:
BSE’s 30-share Sensex rose 1.17 per cent or 453 points to close at 39,052, while NSE’s 50-share Nifty climbed 1.07 per cent or 122 points to end at 11,586.

Twenty-one of thirty Sensex stocks closed higher. RIL (72 points) contributed the most to index's gains, with a 1.71 per cent rise. YES Bank rallied 15.19 per cent.

The bulls were in favour of the gainers on BSE.

All the sectoral indices on BSE closed higher. Auto and Consumer Discretionary Goods & Services were the top sectoral gainers and rose 2.93 per cent and 1.82 per cent, respectively.

The companies with exposure to UK saw their stocks rise. Top software services firm Tata Consultancy Services (TCS), Tata Motors, which owns Jaguar Land Rover, and steel producer Tata Steel rose 1.26 per cent, 9.82 per cent and 2.36 per cent, respectively.

Motherson Sumi, Mastek and Majesco saw their shares rising 12.23 per cent, 4.02 per cent and 1.59 per cent respectively.

Factors behind the rise:

Brexit deal
Negotiators from the UK reached an agreement with officials in Brussels that could pave the way for Britain to finally break its 46-year-old ties to the European Union this month, Bloomberg reported. With the Brexit a deal done, a huge uncertainty was out of the way for global markets, experts said.

Rally in global markets
Sterling surged more than 1 per cent and European stocks rallied after British Prime Minister Boris Johnson and European Union officials said a Brexit deal was done, Reuters reported. British and European stocks rose across the board, with the UK mid-cap index up more than 1.1 per cent. Germany's DAX rallied 0.5 per cent while Ireland's .ISEQ gained 0.3 per cent.

Financials leading the gains
Financial stocks closed higher on Thursday on weekly futures and options expiry. YES Bank rallied 15.19 per cent. State Bank of India, IndusInd Bank, and Axis Bank rose 3.73 per cent, 5.13 per cent, and 2.46 per cent respectively.

Rise in rupee
The domestic currency gained against the US dollar. The rupee rose as much as 30 paise against the greenback amid strong inflows from foreign institutional investors and fall in crude oil prices.

Analysts’ take:
“The Brexit deal propelled the markets in late trade. Also, for the last few sessions, FIIs (foreign institutional investors) and DIIs (domestic institutional investors) are both buying. This is bringing in more conviction. The delivery volumes in top 100 companies by market capitalization is on a rise, which means market is than convinced currently and more money will flow in.”
- Deven Choksey, Group MD, KR Choksey Investment Managers

“Bulls are now completely in control. We have been mentioning about slowly but steadily bulls gaining control over the market. We have continued our bullish bias since 11,150 (Nifty) and continue to maintain an initial target of 11,700. Overall index may hit and test previous all-time highs before the calendar year. 11,100 is a new strong base for the index. In the near term, 11,450 is the support zone and traders should continue to be positioned on the long side."
- Manav Chopra, head research - equity, Indiabulls Ventures

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