SENSEX SMASHES 35000 MARK

The BSE Sensex soared 310 points today to close above the 35,000-level for the first time ever after the government lowered additional borrowing requirement for this fiscal, calming widening fiscal deficit fears. The wider Nifty too finished at its fresh life-time high on unabated buying. Banking stocks ratcheted up after the Centre today lowered the additional borrowing requirement for the current fiscal to Rs 20,000 crore from Rs 50,000 crore estimated earlier. The 30-share benchmark Sensex jumped 310.77 points, or 0.89 per cent, to end at a new peak of 35,081.82, after climbing 35,118.61 intra-day, bettering its previous intra-day high of 34,963.69 reached on January 15. The broader Nifty jumped 88.10 points, or 0.82 per cent, to close at 10,788.55, surpassing its previous record of 10,741.55 hit on January 15. It also touched an intra-day record of 10,803. The Sensex scaled another milestone with strong buying in banking stocks as the government cut the additional borrowing target...easing some pressure on bond yields and fiscal deficit. Strong gains in the rupee after forex inflows also improved the market sentiment.

- It took the benchmark just 17 sessions to scale the 35,000-mark from the 34,000-level reached on December 26.

- FPIs bought shares worth a net Rs 693.17 crore while domestic institutional investors (DIIs) had sold equities worth a net Rs 246.38 crore yesterday, as per provisional data.

- Reflecting the market's bullish mood, all the sectoral indices led by capital goods and bank, ended in the green today, with gains in the range of 0.11-1.59 per cent.

- Among Sensex components, Axis Bank topped the gainers' list by surging 4.65 per cent, followed by SBI 3.44 per cent. Other gainers were ICICI Bank, Yes Bank, Adani Ports, L&T, ITC, Dr Reddy's, Tata Steel, Sun Pharma, Power Grid, Bajaj Auto, Bharti Airtel, HDFC Ltd, Reliance Industries and NTPC, climbing up to 2.68 per cent.

- Shares of IT companies such as Infosys and TCS continued to attract buyers and rose up to 2.61 per cent. Broader markets too finished with gains.

- The mid-cap index rose 0.66 per cent while the small-cap spurted 0.43 per cent.

In the Asian region, Shanghai Composite Index rose 0.24 per cent, while Hong Kong's Hang Seng gained 0.25 per cent. Japan's Nikkei shed 0.35 per cent. In the Eurozone, Paris CAC 40 fell 0.19 per cent and Frankfurt's DAX fell 0.15 per cent. London's FTSE was down 0.27 per cent in early deals.

Nifty may scale 11,800

Expecting an earnings growth of 21.5 per cent next fiscal, domestic stock brokerage HDFC Securities has set the Nifty target at 11,800 for fiscal 2019. The domestic stock brokerage expects Nifty earnings to grow by 13.5 per cent this fiscal year from 10.4 per cent a year-ago. As per its estimates, earnings are likely to register a growth of 21.5 per cent, in fiscal 2019. "There has been some recovery in earnings in the last two quarters, and we believe it to be 21.5 per cent for next fiscal. This will drive Nifty to 11,800 levels for the year to March 2019," HDFC Securities managing director and chief executive Dhiraj Relli told.

Relli further said the performance would also be supported by a positive domestic economic growth with "GDP likely to grow 7.3 per cent in FY19 while GVA is likely print at 7.1 per cent" as GST regime stabilises and the rural economy recovers. He also said recovery in private capital expenditure is on the anvil with encouraging manufacturing PMI and factory output numbers. On the upcoming Budget, Relli said he is not expecting populist spending ahead of the next general elections. On fiscal deficit he said it will be marginal at 10-15 basis points only. On possibility of long term capital gains tax on equities, Relli said he only expects a "soft" introduction with a holding period for tax exemption rising (from 1 to possibly three years) and low tax slab (like 10 per cent) for profits on selling of stocks held for 1-3 years.