Sensex's fastest 1000-pt blitzkrieg in over three years

Sensex closing above 35000 is special in more ways than one.

One can attribute it to the government announcement of a lower borrowing target, but the speed with which the blue-chip benchmark gained 1000 points from the previous milestone of 34000 is remarkable, to say the least.

Data shows that the 30-share Sensex took just 16 trading sessions to surpass 35000 points after closing above 34000 on December 26 last year. This makes it the fastest 1000-point ascent in over three years, which is no mean feat given that markets are approaching an important Budget in a few days.

So far, bulls have blown to bits any reason presented by bears like steady oil price rise, falling GST revenue, and frothy valuations.

A super-charged liquidity cycle, driven by about Rs 8,500 crore of regular monthly equity inflows, has continuously pushed Sensex higher in the past few months.

With Sensex continuously breaking records every few weeks, valuation concerns have grown and a correction is said to be imminent. In this backdrop, the index taking a mere 16 sessions to cross 35000-mark shows the underlying strength of domestic markets, point out experts.

The party is not over it seems.

Rakesh Tarway, head of research, Reliance Securities said, "We believe markets will continue to deliver new highs with more focus on sectors like defence, infrastructure, railways and core manufacturing sectors ahead of the Budget scheduled on 1st February 2018."

This kind of blitzkrieg in stocks was last seen in the middle of 2014, shortly after BJP in May won the general elections to form the government. In just four sessions, Sensex crossed 24000 from 23000 and then took 14 days to end above 25000 on a closing basis.

In terms of 1000-point increases, data shows that Sensex took 43 sessions to surpass 34000 peak on a closing basis from 33K, 70 days to end above 33000, 33 days (32000), and 21 days (31000). However, the index took over 550 days to go from 29000 to 30000 between 2015 and 2017.

Sanjeev Zarbade, vice president - PCG Research at Kotak Securities, said that the equity benchmarks ended at fresh record closing highs on Wednesday despite tepid global cues; the investor sentiment was buoyed by government announcement of a lower borrowing target which drove down the bond yields. Some easing in crude prices also fuelled the market sentiment.

...& ANALYSIS

• Data shows that the 30-share Sensex took just 16 trading sessions to surpass 35000 points after closing above 34000 on December 26 last year
   
• In the backdrop of steady oil price rise, falling GST revenue, and frothy valuations, the leap to 35000 shows the underlying strength of domestic markets, point out experts