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Sensex scales Mount 34K on Santa rally

Fag-end buying and telecom spurt lifts helps index close above the milestone; Nifty closes over 10500 for the first time

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Sumit Moitra

Updated: Dec 27, 2017, 01:05 AM IST

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Waking up from an extended weekend, Indian stock markets witnessed a visit by Santa as benchmark indices hit record highs on fag-end buying and spurt in telecom stocks.

The 30-share Sensex ended at 34010.61, a fresh closing high for Sensex with a gain of 70.31 points, or 0.21%, while the broader Nifty rose 38.50 points (0.37%) to end at a new peak of 10531.50 points.

The day, after a handsome gain of 184.10 points in the previous session on Friday, the Sensex started nervously paring gains soon after opening, dipped into negative zone and hovered around a flat line for the rest of the trading session but finally closed at life highs mainly because of some fag end buying by investors.

Blue chips such as Bharti Airtel, Sun Pharma and Yes Bank, climbed up to 2.59%. Reliance Industries rose 1.03%, Reliance Capital 7.02% and Reliance Power 3.85%. Telecom, realty, metal and health care made gains of up to 2.28%. Broader markets stood out as the mid-cap index rose for the eighth straight session, this time 0.76%, ending at a record. The small-cap index too ruled high for the seventh session, beating the Sensex with a gain of 0.64%.

Foreign portfolio investors bought shares worth a net Rs 107.87 crore while the buying tally for domestic institutional investors was Rs 371.53 crore on Friday, provisional data showed

Markets are likely to be rangebound from here on till at least the end of the financial year, which so far seen Indian markets turning one of the best performers among emerging market peers due to strong foreign and domestic flows.

Global stocks would continue to trade on a lacklustre note as trading has thinned due to year-end holidays in several regions of the world, according to analysts.

While valuations are stretched, the current bull run is fuelled by liquidity inflows, and as long as funds continue to pour in from the constantly growing corpus of Systematic Investment Plans and elsewhere, markets are unlikely to suffer fatigue, analysts said.

"The rally could stretch well beyond January as third-quarter results expectations are good and the global set-up is supportive," Hemang Jani, head of advisory, Sharekhan, said, adding that the brokerage continues to believe in themes including consumption, banks and NBFCs, beneficiaries of GST implementation and sectors like roads, railways and defence, which are dependent on government capital expenditure.

The continuation of the current bull-run also discounts the inherent strength of the domestic economy as the growing importance of Asia's major economies will continue in 2018 and beyond.

The day saw a happy coincidence with the release of a report by the Centre for Economics and Business Research in London, which sees India leapfrogging the UK and France next year to become the world's fifth-biggest economy in dollar terms.

It will advance to third place by 2027, moving ahead of Germany, the report said.

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