Sensex, Nifty hit record highs: Five factors behind the market rally today

The Indian market closed at its record high witnessing an across-the-board rally today. Sensex closed 762.10 points or 1.24% higher at 62,272 . During the day, the index zoomed to an all-time high of 62,412.33. Nifty rose 216.85 points or 1.19% to end at 18,484. The 50-stock index hit a record high of 18,529 during the session.

Sensex has gained 6.90% or 4018 points since the beginning of this year and risen 6.74% or 3931 points in one year. Nifty has risen 6.14% or 1069 points in one year and has rallied 6.51% or 1130 points in 2022. Market cap of BSE listed firms rose to a high of Rs 283.69 lakh crore with investor wealth rising by Rs 2.46 lakh crore in today’s session.

Here’s a look at factors that pushed indices to record highs today.

Slowing of Fed rate hikes  

The latest minutes from the Federal Reserve meeting indicated that most policymakers see a slower pace of interest rate hikes even if they are uncertain how high the benchmark rate will rise.

Vinod Nair, Head of Research at Geojit Financial Services said, "Led by broad-based buying, domestic indices witnessed solid gains as investors digested the latest FOMC meeting minutes, which hinted that the rate hike cycle may be slowing down.”

 Asian markets

The Asian markets were buoyed by the prospects of slowing down of rate hikes by the Federal Reserve. Japan’s benchmark Nikkei 225 ended 0.95% higher to 28,383, following a national holiday Wednesday. Australia’s S&P/ASX 200 added 0.14% to 7241. South Korea’s Kospi gained 0.96% to 2,441. Hong Kong’s Hang Seng rose 0.78 % to 17,660, while the Shanghai Composite fell 0.25% to 3,089.

Correction in crude oil prices  

Brent crude, the international standard, fell 16 cents to $85.25 a barrel. On the other hand, benchmark US crude lost 11 cents to $77.83 a barrel.

Nair from Geojit Financial Services said, “The optimism was further boosted by falling crude prices and the declining dollar index. Crude oil prices dropped over talks of a possible price cap on Russian oil and a rise in US product stockpiles."

Rise in rupee

The rupee ended 30 paise higher at 81.63 against the US dollar on Thursday as a weak greenback in the overseas market and a rally in domestic equities boosted investor sentiments. Forex traders said the dollar slipped in international trade post the weak US data and dovish Fed minutes.

DIIs boost sentiment

Domestic institutional investors (FIIs) bought shares worth Rs 413.75 crore on Wednesday, as per exchange data, which boosted market sentiment.  On the other hand, foreign institutional investors (FIIs) sold shares worth Rs 789.86 crore.

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