Sensex eyes 35,000 mark, Nifty goes beyond 10,700 for 1st time: things you need to know

Key indices brought cheer at Dalal street on Monday. Sensex and Nifty soared to new heights over positive macroeconomic data and encouraging q3 corporate earnings. 

Asian shares too hit historic highs on Monday after Wall Street extended its record-breaking run, while the US dollar retreat continued as investors priced in the risk of tighter policies elsewhere in the developed world.

Back at home, Sensex scaled its fresh all-time high of 34,933.22 in early trade on Monday,  while the NSE Nifty surpassed 10,700 for the first time ever. 

At 12:28 PM, Sensex was trading at 34,897.73 points, eyeing the 35,000 mark, while Nifty50 were trading at 10,754.20. 

Following are the five key reasons behind the record rally of the benchmark indices: 

1. Positive factory output data: 

The industrial output data soared to a two year high at 8.5 per cent. Factory output growth in October was at 2.2% while CPI was at 5.2 per cent from 4.88 per cent a month ago. 

These numbers hold importance as it is the final data that the Finnace Ministry will take into consideration before the Budget of FY18. 

The CPI inflation, which has been rising for two consecutive month in November, was also higher than market expectations for the third time.
 
The latest uptick was mostly led by a sharp rise in vegetables inflation, which shot up to a four-year high of 22.5% in Nov’2017 from 7.5% in the preceding month.
 
Analysts expect to become the factory output more stronger in coming quarters.

2. Encouraging Q3 earnings

The encouraging December quarter earnings of IT major Infosys also contributed the rally behind Sensex and Nifty. Infosys announced the net profit of Rs 5,129 crore for the December quarter over reversal of tax provisions of approximately Rs 1,432 crore.

By these figues, Infosys had witnessed a jump of 37.6 per cent on a quarter-on-quarter basis and 38.3 per cent on a year-on-year basis. 

In September quarter, Infosys had reported a net profit of Rs 3,726 crore. For Q3, the firm posted revenue of Rs 17,794 crore. 

Just like TCS, Infosys Q3 profit and revenue numbers were in line with the estimates. 

Commenting on the Q3 earnings, Salil Parekh, CEO and MD of Infosys, said: "It is a privilege for me to be appointed as the CEO & MD of Infosys, helping our clients navigate the digital future and employees build new skills and capabilities. Our Q3 performance is strong. We had 8 per cent year-on-year growth and 24.3 per cent operating margin with $593 million of free cash flow."

3. Rally in global market 

Asian shares hit historic highs on Monday. Activity was restrained somewhat as a US holiday curbed trade in cash Treasuries, though E-Mini futures for the S&P 500 still made gains of 0.26 per cent.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 percent, having finally cleared the former all-time top of 591.50 from late 2007.

Australia's main index firmed 0.1 percent, while Japan's Nikkei added 0.3 per cent.

Stocks in Hong Kong jumped 0.9 percent from Friday's record closing high. Investors were optimistic that Chinese gross domestic product data for the December quarter due on Thursday would show growth of at least 6.7 per cent for the world's second biggest economy.

Wall Street was on a roll as the fourth-quarter earnings season kicked off with solid results from banks and robust retail sales, driving investor optimism about economic growth.