Benchmark indices Sensex and Nifty came off the day's highs in Wednesday's afternoon session and ended 0.45% higher by the closing bell. Where Sensex closed 181 points higher at 40,651 level, Nifty50 ended the day's trade at 11,999, rising 59 points against its previous close. Sensex clocked second-highest closing ever in trade today. On November 7, the index closed at 40,653.
However, doubts about substantive progress on a partial trade deal between US and China ahead of December 15 deadline for increase of Chinese import tariffs by the US undermined bullish sentiment and kept gains in check.
While Sensex hit its all-time high of 40,816 today, Nifty peaked 12,038, backed by gains in index heavyweight Reliance Industries.
All major sectors except financial services, realty and PSU bank indices, closed in the green.
Sun Pharma, Zee Entertainment, IndusInd Bank, Reliance Industries and Dr Reddy's Laboratories were among the top gainers while Bharti Infratel, Indian Oil Corporation, Eicher Motors, NTPC and State Bank of India were the top losers.
Here's a look at key factors why Sensex hit its all time high today and Nifty crossed the 12,000 mark
Government's disinvestment plan
Market started higher ahead of Cabinet meeting to discuss stake sales in some government-owned companies, analysts said.
"Market traded higher ahead of the cabinet meeting due today to discuss on divestment," quoted Vinod Nair, Head of Research at Geojit Financial Services Ltd.
The Cabinet has given 'in-principle' approval for the sale of strategic stakes in 28 state-run companies including state carrier Air India, HPCL, among others, in a move to help maintain the fiscal deficit target.
Reliance Industries share rally
The rally was led by index-heavyweight Reliance Industries which made fresh 52-week high in early trade. Reliance Industries (RIL) was among the top gainer on both bourses today.
RIL share price skyrocketed to an all-time high of Rs 1,571 after Reliance Jio, RIL's wholly owned subsidiary, said it planned to hike tariffs in the next few weeks after Bharti Airtel, Vodafone hiked tariff.
Decline in crude prices
Oil prices slipped for the third straight day and neared its lowest level in more than two weeks after a report showed a rise in American crude stockpiles in the past week, coupled with US-China trade war tensions among investors. Brent crude futures eased to $60.86 a barrel while US crude recouped a slight 8 cents to $55.29. Although post-Wednesday's closing hour, Brent crude traded flat at $60.20 per barrel.
India Inc's earnings for the quarter ended September turned marginally better this season. Further, companies also expect a recovery in 2HFY20 following a revival in the monsoon and festive demand.
Nifty50 broke above its crucial resistance level of 12,000, although it erased early gains to close a tad lower than the 12,000 mark at 11,999.
"Some mild profit booking is still happening above the 12k mark. We continue to remain overall positive on the index and believe the index is poised to hit fresh all-time highs above 12,100 zone", quoted Amit Shah, Technical Research Analyst with Indiabulls Ventures Ltd.
Sameet Chavan, Chief Analyst-Technical and Derivatives from Angel Broking said," Market opted for some profit booking at higher levels but still we remain upbeat and expect the index to first test 12050 and then move towards the record highs."
"On the lower side, the support is continuously getting shifted higher, first from 11700 to 11800 and now from 11800 to 11960 - 11900," he added.
By Rupa Burman Roy