Continuing the uptrend from last week, the domestic equity market surged to yet another record high on Monday, with both the headline indices - Sensex and Nifty - closing at fresh new levels. The Sensex closed 330.87 points or 0.87% higher at a new high of\u00a038,278.75 points. The Nifty 50 of the National Stock Exchange closed above the 11,500-level for the first time ever at a record level of 11,551.75 points, up 81 points or 0.71%. The indices also scaled their record 52-week (intra-day) high levels - the Sensex at 38,340.69 points and the Nifty at\u00a011,565.30 points. We take a look at the 5 key factors that drove the stock market rally on Monday, August 20, 2018. Easing US-China trade war concerns: Global stocks rose on Monday amid optimism over planned trade talks between the US and China, said a Reuters report. European shares opened higher, as investors hoped the US and China might find a compromise to resolve their trade dispute. China and the US will hold lower-level trade talks this month, the two governments said last week. Asian stock markets seemed to welcome the news, with MSCI's broadest index of Asia-Pacific shares outside Japan climbing nearly 1%. "It was a buoyant day on the bourses as key benchmark indices opened on a positive note and held on to gains as the session progressed. Positive global stocks, optimism over a trade resolution between the USA and China and strong institutional activity at home fuelled investor sentiment and pushed the bourses to close the day with gains of over 0.50%," said Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund. Recovery of rupee from record lows: The rupee recovered from its record low levels and climbed by 38 paise to 69.77 against the US dollar in early morning trade on Monday on the back of a weak US Dollar and a higher opening of the domestic equity markets. On an intra-day basis, the rupee scaled a high of 69.60, rising almost 55 paise against the American currency. On Thursday, the rupee had collapsed to a fresh intra-day low of 70.40 before closing at a new low of 70.15 against the greenback, down by 26 paise or 0.37%. Blue-chip stock buying: Good buying in selective blue-chips like Larsen and Toubro, Reliance Industries, HDFC, HDFC Bank, Tata Motors, SBI, ONGC, Tata Steel, Vedanta and Bajaj Auto lifted the S&P BSE Sensex index to record levels on Monday. L&T stock alone contributed 103.09 points to the Sensex, while RIL added 102.74 points to the index. The HDFC twins together added 102 points to the index. "Nifty marked a fresh all-time high of 11,565 as positive cues from global as well as domestic front triggers fresh buying," said Mustafa Nadeem, CEO, Epic Research. "The day was green on the back of large caps which carried the momentum such as Reliance, L&T, HDFC Twins, Tata motors followed by SBI." Foreign fund inflows:\u00a0A PTI report said that foreign investors have pumped in over Rs 7,500 crore into the Indian capital markets so far in August due to better corporate earnings and improvement in crude oil prices. According to the latest depository data, foreign portfolio investors (FPIs) had pumped in Rs 2,409 crore into equities and Rs 5,168 crore into the debt market during August 1-17, taking the total to Rs 7,577 crore.\u00a0Overseas investors had pulled out over Rs 61,000 crore during April-June. Growth outlook for Indian economy: Former chief economic advisor Arvind Virmani on Monday said that India\u2019s economic growth seems to be back on a recovery path and the country will be on a firm 7.5% plus growth track this fiscal, according to a PTI report. Virmani said the US-China tariff war provides an opportunity to increase India\u2019s exports to the US.