Sensex enters middle age, hits 35000

The excitement and jubilation were palpable on D-Street as Sensex topped 35000 despite weak global cues that saw bourses in Europe, the US and several Asian countries falling.

Indian indices touched a new record on the back several market-friendly news like government scaling down additional borrowing, an expectation of some major changes in goods and services tax, easing in crude prices and rupee rising 16 paise to 63.88 against the US dollar.

The S&P BSE Sensex spurted 310.77 points to close at 35081.82 while Nifty 50 index jumped 93.05 points to 10793.50.

"After a largely choppy session, the bulls consolidated their position towards the end with the S&P BSE Sensex scaling 35000 points for the first time ever and the Nifty 50 Index narrowly skirting the level of 10800 points. The gains were led by a rise in shares of banks and benchmark heavyweights," said Karthikraj Lakshmanan, senior fund manager at BNP Paribas Mutual Fund.

The news of government planning to reduce additional borrowing allayed fears of widening fiscal deficit ahead of the Budget, leading to softness in yields and triggering buying in banking stocks.

Weak trade data pushed investors to buy shares of information technology companies.

"It is remarkable as markets are rising in the phase of adverse expectations," said Dhiraj Relli, MD and CEO of HDFC Securities.

Not all could participate in the celebration though.

In fact, sector-wise, the rally was driven mostly by BFSI, IT, pharma, metals and select FMCG stocks and other key sector-specific indices traded in the red.

Nifty PSU Bank index rose 4.17% supported by Axis Bank, SBI and ICICI Bank.

Most IT stocks gained led by Infosys (2.5%) and TCS (1.9%) though Wipro fell 1.48%.

"We believe that this is a stock pickers' market. While broad index-based returns may remain capped with the markets touching new highs, fundamentally strong stocks would outperform," said Nitasha Shankar, head of Research at YES Securities.

Markets are likely to scale newer peaks in coming days on expectations of strong earnings growth – economy bell weather Hindustan Unilever posted a profit jump of a whooping 28% and volume growth of 11% during the day - though wary analysts have been talking of muted market movements in the coming days.

FMCG, IT PARTY

Sector-wise, the rally was driven mostly by banking, financial, IT, pharma, metals and select FMCG stocks while the other key sector-specific indices traded in the red