Nifty crosses 13K for first time, Sensex hits record high: Five factors behind the rally

Sensex and Nifty hit fresh record highs in early trade today buoyed by the prospects of a coronavirus vaccine which could help in recovery of the global economy. Nifty crossed the key level of 13,000 for first time and hit an all time high of 13,033 in opening trade.

Sensex too scaled a record high of 44,487, rising 410 points in early trade against previous close of 44,077.

Gains were led by banking stocks with the BSE bankex rising 556 points to 33,902 against previous close of 33,346. Similarly, Bank Nifty rose 493 points to day's high of 29,517 against previous close of 29,024.

Here's a look at five factors which led to the rally on Sensex and Nifty today.

Transition of power in US  

Progress on US President-elect Joe Biden's transition to the White House also helped boost investor sentiment globally. The US Federal government recognised Biden as the "apparent winner" of the November 3 election, giving the green light for cooperation on a transition of power despite efforts by President Donald Trump to overturn the election.

Covid vaccine hopes

Indian and global markets rose after Drugmaker AstraZeneca said that late-stage trials showed its COVID-19 vaccine was highly effective, buoying the prospects of a relatively cheap, easy-to-store product that may become the vaccine of choice for the developing world.

The Oxford-AstraZeneca vaccine need not be stored at freezer temperatures, making it potentially easier to distribute, especially in developing countries.

Strong FII inflows

Buoyed by improved economic conditions, foreign institutional investors (FIIs) have infused Rs 50,998 crore into Indian equity market this month. This is the highest ever monthly inflows by FIIs leading to positive sentiment in the equity market.

High auto sales

A rise in demand during the festive season also led the benchmark indices higher for the third straight session. In October, healthy off-take on the back of festive season, along with pent-up demand and attractive interest rates, accelerated major automobile players' year-on-year (YoY) and sequential sales numbers. The trend is expected to continue in November too with all auto players announcing heavy discounts during Diwali and Dhanteras.

Subsequently , the BSE auto index rose 320 points to 20,076 in early trade contributing to gains  in Sensex and Nifty.

Share Market News Live: Sensex hits record high, Nifty crosses 13,000 for first time; Titan, HDFC top gainers

Global markets

Japan's benchmark Nikkei 225 jumped 2.6% to 26,184.48 in early trading. Australia's S&P/ASX 200 gained 1.1% to 6,631.70. South Korea's Kospi added 0.5% to 2,616.70. Hong Kong's Hang Seng inched down nearly 0.1% to 26,467.30, while the Shanghai Composite slipped 0.3% to 3,405.34. The S&P 500 rose 0.6% to 3,577.59 on Monday.

The Dow Jones Industrial Average gained 1.1% to 29,591.27. Nasdaq composite added 0.2% to 11,880.63.