Global rally lifts Indian markets to a record high

MUMBAI: India’s equity benchmarks set a new record on Monday as reassuring comments from the US central bank, China’s attempts to stabilise the yen and easing trade war fears lifted stocks worldwide and triggered a gush of domestic liquidity. The Sensex and Nifty both rose over 1.2% during the day, their biggest single-day gain in two months. The 30-share Sensex rose 442.31 points, or 1.16%, to 38,694.11 points, while the 50-share Nifty gained 1.17% to 11,691.95 points.

MSCI’s broadest index of AsiaPacific shares outside Japan rose 1.1% and Japan’s blue-chip Nikkei closed at a 10-week high. MSCI’s All-Country World index, which tracks shares in 47 countries, is now at its highest level since August 9.

According to data from BSE, domestic institutions pumped in ₹1,117.24 crore into stock markets on Monday, accounting for nearly a third of the ₹3,334.55 crore they invested in Indian equities in all of August.

Comments from US Federal Reserve chief Jerome Powell at the Jackson Hole symposium on Friday affirming that the US central bank was sticking to its strategy of gradual rate hikes to protect economic growth sparked a rally that gathered pace at the beginning of the new week.

A strengthening in the yuan, which had suffered from trade tensions, also boosted sentiment. The Chinese currency hit a 2-2.5-week high versus the dollar after China’s central bank revived a “counter-cyclical factor” in its daily fixing to support the currency, arresting a record 10-week slide that rattled global markets and irritated Washington. “It is both the tailwinds from global markets and massive insti-

tutional buying which has led to the Indian equities rally,” said Ajay Bodke, chief executive and chief portfolio manager (PMS) at brokerage Prabhudas Lilladher.

According to the Association of Mutual Funds in India (Amfi), average assets under management of India’s mutual fund industry in July was a record ₹23.96 lakh crore.

Domestic institutional investors (DII) including insurance and mutual fund companies have pumped in ₹70,164.97 crore so far in 2018. In contrast, foreign institutional investors (FIIs) were net sellers of Indian equities worth $311.72 million in 2018, but bought $161.85 million in August.

Reuters contributed to this story.