Nifty crosses 5700, rupee rallies after govt sticks to borrowing plan

The government’s plan to stick to its borrowing target for the rest of the year seems to be boosting the Indian markets, with the Sensex up 1 percent at 18759.50 and the Nifty up 0.8 percent at 5698.45.

The finance ministry asserted its commitment to containing fiscal deficit by sticking to its borrowing target and said that government will borrow Rs 2 lakh crore in the remaining period of the current fiscal to stick to the target of or 5.1 percent of the Gross Domestic Product

Even the rupee has risen to a near five-month high. At 9:12, the rupee was trading at 52.72 level against the dollar, up 0.58 per cent or 30 paise from yesterday’s close of 53.01. The currency had jumped to 52.56 levels to the dollar at open helped by continued inflows on hopes for improved global liquidity.

Technical analyst Sudarshan Sukhani of s2analytics.com suggests taking long positions if the Nifty manages to hold 5,700 levels in the first hour of trading. If Nifty maintains this level, one can expect the market to breakout after a narrow range on the upside, he told CNBC-TV18.

Ambit Capital has raised the Sensex target to 23000 for the next 12-18 months.They expect panic buyingof Indian equities over next month.

RIL, Infosys, Wipro, TCS, Tata Power, Bharti Airtel, Maruti, Coal India, HDFC, ICICI Bank,L&T, M&M,NTPC, ITC, HUL are among gainers in Sensex and Nifty. Bajaj Auto, Cipla are among losers in Sensex and Nifty.

FMCG, Realty, Oil and Gas,IT, Teck, Bankex,Capital Goods, Consumer Durables, Metal, Power and HC indices are the gainers.

The undertone is still upbeat on optimism that the government will carry on its reforms agenda forward in the coming days and weeks. FII inflows remain strong although domestic institutions have been net sellers.

Corporate confidence may also improve on the back of the slew of reforms announced by the Government lately.

The main focus next month will be on domestic quarterly earnings.

There will be buzz in the UB group stocks, especially Kingfisher Airlines, as the National Stock Exchange and the BSE have sought clarifications on reports that the carrier is in talks with foreign entities and domestic investors for stake sale. UB Holdings is down 2.5 percent, Kingfisher Airlines down 5 percent and United Spirits is down 2.3 percent.

Fitch Ratings has cut its 2012 growth forecasts for India to 6 percent from 6.5 percent on deteriorating global growth outlook with diminished willingness or capacity to respond with domestic policy loosening, compared with 2009. But the markets seem to have ignored the warning.