The Government’s lowering the additional borrowing requirement for the current fiscal to Rs 20,000 crore from Rs 50,000 crore estimated earlier, and positive sentiments in quarterly corporate earnings lifted the key Indian equity indices — Sensex and Nifty — to record life highs on Wednesday.
Driven by banking & financials results, BSE benchmark Sensex soared 310 points to close above the 35,000-level for the first time. The wider Nifty too finished at its fresh life-time high on unabated buying. The intra-day rally witnessed a massive surge after the Government announced lowering additional borrowing requirement for this fiscal, calming widening fiscal deficit fears. Besides banking stocks, some key sectors such as technology, pharma, metals and select FMCG stocks too participated in the rally.
Showing an impressive resilience, the rupee also bounced back in style after a brief overnight crash and ended higher by 16 paise at 63.88 against the US currency on bouts of dollar selling by exporters and banks.
The Government’s reduction in requirement of additional borrowing for FY18 that painted a robust fiscal picture and likely early resolution to NPA or bad loan accounts lifted market sentiment.
In the early trade, banking stocks ratcheted up after the Centre lowered the additional borrowing requirement.
The 30-share Sensex surged 310.77 points, or 0.89 per cent, to end at 35,081.82, breaking its previous record of 34,843.51 reached on January 15. It took the benchmark just 17 sessions to scale the 35,000-mark from the 34,000-level reached on December 26. 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. The IT sector continues to trade at 52-week highs with upgrades post Q3 FY18 results and positive comments from the management with improvement in IT spending and budgets owing to new initiatives like artificial intelligence and automation,” said Rakesh Tarway, Head of Research, Reliance Securities.
Strong gains in the rupee after forex inflows also improved the market sentiment. Meanwhile, foreign portfolio investors (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 on Wednesday, as per provisional data.
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.