The BSE Sensex has been on a rise this week, and it touched a fresh high on Friday morning. It marked a record closing peak on Thursday after 5 months from its previous record in January this year. To understand what drove the rise in the index this week, here are five major factors:
Crude oil prices
Crude oil prices have been fluctuating throughout the week and international benchmark Brent is moving towards a big weekly decline of 4 percent. The sparse supply caused by unexpected production disruptions from Libya, Canada, Venezuela and others was compensated by the increase in production from OPEC (Organization of Oil Exporting Countries) and its ally Russia. There have also been positive signs of Libya returning to the oil market. US crude (WTI) too was experiencing a fall, heading towards a weekly fall of 5 percent this week.
A Reuters report stated that the heavy losses were from the return of Libyan oil to the market and concerns of traders over the US-China trade war.
The Indian rupee recovered from its all-time low against the dollar (69.09). It has been opening higher for the last two days, gaining as much as 37 paise and trading at a three-week high. At 11.52 am on Friday it was at 68.45 against the US dollar as per Bloomberg data. RBI intervention through capital infusion in Indian markets helped the Indian rupee. Data on NSE showed a rise in investment through foreign funds this week.
Statistical data release
Inflation data on India, China, and the US was released this week. Data released by the CSO on Thursday showed that the Indian retail inflation based on Consumer Price Index (CPI) was up by 5 percent compared to May's 4.87 percent.
At the same time, the industrial production growth was lowered to 3.2 percent in May from 4.8 percent in April. However, 13 out of 23 sectors showed a positive growth as government spending and higher household leveraging have driven the growth in capital and consumer durables. Electricity and manufacturing showed a positive growth in the month of May.
US inflation results released on Thursday also showed a gradual rise. A 2.9 percent rise was seen in CPI (the biggest since February 2012 for the US economy).
The Q1 results season started off on Tuesday with India's largest information technology company TCS reporting a 15.8 percent growth in consolidated revenue for the first quarter of 2018-19. Most Nifty 50 companies are expected to report a positive growth for the quarter in review, thus increased optimism of investors in the Indian markets.
Other blue-chip companies like Infosys (results today), HDFC Bank and Kotak Mahindra are going to announce their Q1 results this month.
Shares of top technology companies in the US like Facebook, Microsoft and Amazon reported record highs this week. Microsoft's market capitalization rose beyond $800 billion this week for the first time ever. Indices S&P 500, Nasdaq Composite, Dow Jones Industrial Average gained.
In Asia, markets recovered from US President Trump's decision to impose new tariffs on China. On Thursday, Shanghai Composite closed up by 2.1 percent, Hong Kong's Hang Seng Index rose 0.6 percent, Japan's Nikkei was up 1.1 percent and South Korea's Kospi rose slightly.