Sensex hits all-time all high of 39,115, Nifty rises to 11,738: Five factors that drove the rally

Sensex crossed 39,000 level for the first time ever led by gains in metals, consumer durables and capital goods stocks on the first day of new financial year today. Nifty too crossed 11,700  mark in early trade, falling 45 points short of its all time high level hit last year. Sensex touched 39,115, a fresh all-time high rising 443 points against its previous close of 38,672. The index breached its previous record high of 38,989 hit on August 29 last year. The Nifty too hit an intra day high of 11,738, 22 points short of its all-time high of 11,760 hit on August 29, 2018.

RBI policy, politics, macro data to drive Indian market next week

While Nifty has logged 7.71% gains since the beginning of 2019, Sensex has clocked 8.05% rise during the same period.

Share Market Live: Sensex crosses 39,000 mark for first time; Nifty above 11,700

Sensex and Nifty have recorded 16.30% and 13.80% gains during the last one year. Here's a look at five factors why Sensex hit fresh all time high in trade today.

Rate cut hope from RBI 

Markets are buoyant on analysts' expectations that Reserve Bank of India (RBI) may cut key lending rates by another 25 basis points on April 4 to boost economic activities amid fears of global slowdown impacting domestic growth prospects. A rate cut on Thursday will lead to a relief to home and auto loan buyers days ahead of the Lok Sabha elections. This will leave more money in the hands of consumers which will in turn lead to a rise in expenditure adding to the growth of economy. RBI had reduced the repo rate by 25 basis points in February after a gap of 18 months. A back-to-back cut in interest rate would provide relief to borrowers in the election season. The six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das will meet for three days in Mumbai and announce the decision on interest rate on April 4. It would be the first bi-monthly monetary policy of 2019-20.

Renewed FII interest in Indian markets

Foreign institutional investors (FII) inflows into the Indian market hit a 23-month high in March which led to gains in benchmark indices today. FIIs infused Rs 48,751 crore into Indian market last month compared to Rs 12,053 crore in February this year. In January, FIIs pulled out Rs 5,556 crore from the Indian market. FIIs poured in Rs 56,261 crore into Indian markets in March 2017, higher than the last month inflows.

Hopes of a BJP victory in Lok Sabha election

Markets have gained amid reports that BJP will win the Lok Sabha election, though with a reduced margin compared to the 2014 elections.

The coalition led by Prime Minister Narendra Modi's National Democratic Alliance could win 264 seats in the election compared to 141 for the Congress party-led opposition alliance, according to the CVoter opinion poll. A Times Now-VMR opinion survey has predicted that the NDA is all set to return to power winning 283 seats in the Lok Sabha election. Election will be held for 543 Lok Sabha seats from April 11 to May 19 this year.  272 seats are needed to form the government.

The Sensex and Nifty have logged stellar gains since the election schedule was announced on March 10 this year. Till date, the Sensex has risen 2,357 points and Nifty has gained 680 points since March 10.

Global markets

Asian stocks were trading higher today as positive Chinese factory gauges and signs of progress in Sino-US trade talks boosted sentiment across the globe. Markets gained as China's official purchasing managers' index (PMI) released on Sunday showed factory activity unexpectedly grew for the first time in four months in March.

Japan's Nikkei 225 index added 1.6 percent to 21,539.75, easing off earlier highs after newly released economic data showed conditions deteriorating. The Shanghai Composite index jumped 2.3 percent to 3,161.49 and Hong Kong's Hang Seng added 1.7 percent to 29,530.19. China's statistics bureau and an industry group said Sunday their monthly purchasing managers' index rose to 50.5 on a 100-point scale on which numbers above 50 show activity increasing. That was up 1.3 points from February.

Stocks finished broadly higher on Friday as Wall Street closed out the first quarter with the market's biggest gain in nearly a decade. The S&P 500 index gained 18.96 points, or 0.7 percent, to 2,834.40. The index also notched a gain for the week. The Dow Jones Industrial Average rose 211.22 points, or 0.8 percent, to 25,928.68. The Nasdaq composite added 60.16 points, or 0.8 percent, to 7,729.32. The Russell 2000 index of smaller company stocks picked up 4.63 points, or 0.3 percent, to 1,539.74.

Progress in US-China trade talks

Investors are hoping for progress in US-Chinese trade talks that are due to resume in Washington after a round in Beijing last week that US Treasury Secretary Steven Mnuchin described as "constructive." Officials from the world's two biggest economies are aiming to put to rest a dispute over technology and other issues. Chinese Vice Premier Liu He is expected to travel to Washington next week.

"The ongoing US-China trade conflict has provided a steady stream of conflicting signals for the markets. But as a whole the negotiations appear to be headed towards a conclusion," said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management. "Hopes that the United States and China would reach an agreement on trade as early as this month are enabling stocks to begin the quarter on a positive tone."

Edited by Aseem Thapliyal