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Sensex scales lifetime high amid drop in oil prices; closes at 36,548

India best-performing market in 2018 with a gain of 7%; previous all-time high was on Jan 29

Pavan Burugula  |  Mumbai 

markets, sensex, nifty
The recent gains have helped the Indian markets cement their place as the best-performing global markets this year

Sharp gains in index-heavyweight (RIL), along with positive global cues, propelled the benchmark to a lifetime high on Thursday.

Domestic investors also cheered the 7 per cent fall — the biggest single-day drop in two years — in global crude oil prices, a key macro headwind for India.

The climbed 282.5 points, or 0.8 per cent, to close at 36,548, surpassing its previous all-time high of 36,283 on January 29. The reclaimed the 11,000 mark, but closed 1 per cent short of its record high at 11,023. Both the indices logged their fifth straight session of gains, owing to advances in index movers such as RIL, Bank, and Tata Consultancy Services (TCS).

Positive global cues also helped investor sentiment, with the Asian gaining between 0.5 per cent and 2 per cent, while the European opening nearly 1 per cent higher.

The broader markets, however, failed to extend their gains with the and small-cap indices declining 0.5 per cent and 0.1 per cent, respectively.

ALSO READ: After Sensex rally, mid-and small-caps likely to play catch up: Analysts

have crossed all-time highs on the back of global cues as well as a solid start to the earnings season with beating expectations. We expect the markets to remain in a tight range with higher volatility, given the busy political calendar ahead. Our relative preference stays with large-caps because mid-caps are still trading at a premium to large-caps,” Gautam Duggad, head of research, Motilal Oswal Institutional Equities.

The recent gains have helped the Indian markets cement their place as the best-performing this year. The rallied 7.6 per cent in local currency terms in 2018. However, owing to the weakness of the rupee, the index is flat in terms but still better than most emerging market (EM) peers. which have yielded negative returns. The steep correction in EMs this year is on the back of offshore investors pulling out money amid rising and bond yields.

ALSO READ: IT, Private Banks, RIL, HUL help Sensex to hit record high

In 2018, foreign portfolio investors pulled out $70 billion from EMs, with China alone seeing a sell-off of $37 billion. Foreign funds have pulled out only $800 million from India in 2018, while comparable markets such as Taiwan, Thailand, and South Korea have seen sell-off to a tune of $9.7 billion, $6.1 billion, and $3.7 billion, respectively.


“While most of the emerging and developed markets are struggling, the Indian markets have successfully climbed the wall of worry. This reflects the resilience of our markets and an inherent faith in the superior long-term fundamental story,” said Manish Gunwani, chief investment officer (equity), Reliance Mutual Fund.

India’s outperformance this year has been on account of gains in select index heavyweights and strong support buying from mutual funds (MFs).

In the 30-share Sensex, 17 stocks gave negative returns this year. A large portion of gains made by the Sensex were due to a rally in six key stocks: TCS, Infosys, Hindustan Unilever, RIL, HDFC, and Bank. All these stocks have a high weight in the index and hence have offset the weakness in shares of other companies like Tata Motors and Vedanta. Had the index been an equal-weight one, the Sensex would be trading 7.7 per cent lower.


First Published: Thu, July 12 2018. 21:26 IST