What moved the Market today:-
The stock market's stellar show continued on Friday as risk-on sentiment revived on Dalal Street.
The S&P BSE benchmark gained 5.1 points during the week while the 50-share Nifty50 managed gains 5.2 per cent.
"For long-term investors, this is as good a market as it can get, because you are getting a lot of stocks at good valuations," said P Phani Sekhar, Fund Manager - PMS, Karvy Stock Broking.
Experts and analysts are unanimous in their view that this breakout is sustainable and it will take the market to even higher levels.
So, what are the driving factors behind this rally? Going by the buzz on Dalal Street, six factors are driving this leg of the market surge.
Earnings and L&T: Earnings have been one of the crucial factors driving the market. The week saw some 868 companies reporting their March quarter numbers, which include biggies like L&T, SBI, BPCL and ONGC .
"The expected revival in corporate Earnings is playing a major role in the rebound in market sentiment. Index valuation at a PE of around 19 times (FY16E) has been quite comfortable too," said Motilal Oswal, CMD, Motilal Oswal Financial Services.
Perhaps the biggest surprise of them all came from the bellwether stock, Larsen & Toubro, which met expectations on most counts. It posted net profit growth of 18.53 per cent while meeting the lower end of its FY16 revenue guidance.
More importantly, the company gave a guidance for 15 per cent growth in FY17, above analysts' expectation. The 17 per cent rally in the stock has proved a blessing for the benchmarks.
Comfort with Fed hike: Global sentiment, especially those in the US, took a favourable turn towards a possible interest rate hike by the us Federal Reserve. After the FOMC minutes made it apparent that the Fed may see it fit to move on a rate hike in either June or July, a rally led by the financial stocks fuelled risk-on sentiments around the world .
FIIs were not cagey anymore and they have started pouring money into emerging economies, like India.
Monsoon bonanza: Skymet, a private weather research agency, said it saw monsoon being 109 per cent above its long-term average as El Nino condition over the Pacific Ocean retreated for good.
Weathermen across the globe, now, expect the built of cool water in the Pacific trigger a La Nina condition, which is believed to be beneficial for rainfall in the Indian subcontinent.
"An expectation of better-than-average monsoon is positively affecting sentiments," Motilal Oswal said.
Bullish market seems gives SBI thumbs up: One of the biggest signs of the current market rally sustaining is the market's reaction to the staggering losses posted by public sector banks, including SBI.
State Bank of India on Friday posted a 66 per cent decline in its Q4 net profit with provisions for bad loans for the quarter jumping to Rs 12,140 crore. The stock ended higher by 9.36 per cent.
Most experts believe the worst is over as far as the asset quality review done by the Reserve Bank of India is concerned.
Technical support: The Nifty50 managed to breakout above its 200-day moving average of 7,785 and beyond the crucial 8,000 mark that had been an obstacle for the index for over a month since its first reclaimed 7,900.
The index is also closing in on one of the most bullish technical indicator - a Golden Cross. Under it, the 50-DMA moves above the 200-DMA to suggest long-term buying. The gap between the two has narrowed down to 25 points for Nifty50.
Biggest contributors of Sensex rally: The march on the Sensex was led by stocks of L&T, ICICI Bank, Vedanta, Hindalco , ITC, SBI, BHEL and HUL. L&T was the biggest gainer for the week, up 17 per cent while ICICI Bank gained 10 per cent, ITC 9.62 per cent, BHEL 8 per cent, Vedanta 7 per cent and HUL 6.5 per cent.
Two of the biggest gainers - L&T and BHEL - are considered to be bellwethers of the economy and indicate the returning belief of investors on economic revival.