1. Nifty hits 10000: Five factors that drove NSE index to 5-digit mark

Nifty hits 10000: Five factors that drove NSE index to 5-digit mark

The broader benchmark index, Nifty 50 crossed the historical five-digit figure of 10,000, hits a record high on Tuesday rising as much as 44 points from the previous close on Monday. Stocks in focus ahead of their first quarter earnings are Asian Paints, Axis Bank, Bharti Airtel, Hero MotoCorp and Vedanta.

By: | Published: July 25, 2017 9:59 AM
The 50-share barometer opened 0.44% higher at 10,010.55 points. BSE Sensex also hit a record high rising over 100 points clocked a peak of 32,374.3 points.

The broader benchmark index, Nifty 50 crossed the historical five-digit figure of 10,000, hits a record high on Tuesday rising as much as 44 points from the previous close on Monday. The 50-share barometer opened 0.44% higher at 10,010.55 points. The major gains in the shares of blue-chip companies Bharti Infratel, HDFC Bank, Indiabulls Housing Finance, Vedanta, ICICI Bank helped the indices to scale new peaks in early trade. BSE Sensex also hit a record high rising over 100 points clocked a peak of 32,374.3 points.

Here are the five reasons which drove Nifty to 10,000:

Earnings optimism:

The optimism of better than expected earnings for the first quarter of the financial year 2017-2018. Mobile tower company Bharti Infratel shares top the list in contributing to the Nifty hitting the record breaking milestone of 10,000. However, yesterday the company reported 12% decline in consolidated net profit to Rs 664 crore for the June quarter of the current fiscal. HDFC Bank reported 20% increase in net profit for the quarter ended June 30 yesterday remained the second pointwise contributor in driving the index to record highs.

One of the leading domestic mortgage lender Indiabulls Housing Finance yesterday reported a 25% jump in the June quarter net at Rs 788.2 crore. Ambuja Cements yesterday reported an 11.85% growth in consolidated net profit at Rs 718.24 crore. Media firm Zee Entertainment Enterprises Ltd yesterday reported a 15.84% rise in its consolidated net profit at Rs 251.44 crore for the quarter ended June 30. 

Blue-chip stocks which will be in focus ahead of their first quarter earnings are Asian Paints, Axis Bank, Bharti Airtel, Hero MotoCorp and Vedanta.

Swelling up of forex

The country’s foreign exchange reserves rose by USD 2.681 billion to touch a new life-time high of USD 389.059 billion in the week to July 14, helped by an increase in foreign currency assets (FCAs), RBI data showed. In the previous week, the reserves had marginally declined by USD 161.9 million to USD 386.377 billion. Gold reserves remained unchanged at USD 20.348 billion. 

Foreign Portfolio Investors influx:

Overseas investors have pumped in USD 2.4 billion in the capital markets this month, enthused by the trouble-free roll-out of GST and on hopes of better corporate earnings, taking the total to USD 25 billion so far this year. According to latest depository data, FPIs invested a net Rs 2,977 crore in equities during July 3-21, while they poured Rs 12,371 crore in the debt markets review, translating into a net inflow of Rs 15,348 crore. The latest figures show a net infusion of Rs 1.6 lakh crore in the previous five months (February-June) on several factors. In January, they had pulled out over Rs 3,496 crore.

Rate cut expectations:

There are now renewed hopes of a rate cut by the Reserve Bank at its policy meet next month after retail inflation hit a low level of 1.54% in June and industrial output growth slumped to 1.7% in May. “The number of 1.54% is historically low and reflects the firm and ongoing consolidation of macroeconomic stability,” Chief Economic Adviser Arvind Subramanian told reporters. “The last time we saw such inflation — according to slightly different CPI (IW) — was in 1999 and before that in August 1978,” he added.

Blue-chips hitting 52-week highs:

Shares of heavyweight companies Reliance Industries, Wipro, ICICI Bank recently made new 52-week highs after the oil-to-telecom conglomerate Reliance Industries Ltd launched the Jio Phone and cable TV while the major IT companies gained on the back of proposed share buybacks in order to distribute the extra cash reserves on their books with the most recent announcement coming from Wipro of worth Rs 11,000 crore.

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