A benchmark index of Indian equity markets on Tuesday crossed the 24,000-point mark for the first time in its history, recording the third straight high.
At 24,068.94 points, it was the highest mark so far, surpassing the previous record of 23,573 points hit on Monday as the exit polls showed the Bharatiya Janata Party (BJP) and its allies closing in on a majority in the country’s just-ended general elections, reported IANS.
Reuters reports that Narendra Modi is set to become India’s next prime minister with four major exit polls broadly tipping the BJP-led coalition on Monday to grab the 272 seats needed to clinch a majority. The actual results are due on Friday.
However, exit polls by media organisations have proven unreliable in the past, while doubts have started emerging over whether markets have run ahead of fundamentals as election optimism overshadows issues like tepid earnings growth, fiscal deficit and sticky inflation.
The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which crossed the 24,000 points in the morning session, opened Tuesday’s trade at 23,729.78 points, and ended trade at 23,871.23 points, a record closing high, up 320.23 points or 1.36 percent from the previous day’s close at 23,551 points.
The Sensex touched a high of 24,068.94 points and a low of 23,729.25 points intra-day, IANS said in the report.
“The exit polls, which predicted a victory for the BJP-led NDA, gave further fillip to the markets as they closed at a new record,” said Dipen Shah, head, private client group research, Kotak Securities.
“Expectations are now of a stable government at the centre and that has raised hopes of better growth for the economy. The markets have risen based largely on these expectations,” he added.
“While the long-term uptrend remains intact, the market looks a bit stretched as it has discounted 260-270 seats for NDA now, so a rally would extend only if we get a positive surprise of say 300 seats,” Reuters quoted Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.
“The market had wind of exit polls’ results and, therefore, had run nearly five percent in two days before that.”
The rally was led by the capital goods, oil and gas, information technology (IT), consumer durables and technology, entertainment and media (TECK) sectors.
The S&P BSE capital goods index gained 324.43 points, oil and gas index surged by 295.35 points, IT index went up by 224.23 points, consumer durables index rose by 206.24 points, and TECK index moved up by 108.10 points.
However, healthcare index fell 47.59 points.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) too closed at a record high. It surged 94.50 points or 1.35 percent and closed at 7,108.75 points after climbing to an all time high of 7,172.35 points.
The prominent gainers were: Bharat Heavy Electricals, up 10.25 percent at Rs.218.80; Hero MotoCorp, up 5.39 percent at Rs.2,428.85; ONGC, up 3.81 percent at Rs.372.05; Tata Power, up 3.62 percent at Rs.84.55; and Wipro, up 3.36 percent at Rs.528.80.
The losers included Dr Reddy’s Lab, down 3.99 percent at Rs.2,610.70; Tata Motors, down 0.94 percent at Rs.440.80; Hindalco Inds, down 0.84 percent at Rs.142.30; HDFC Bank, 0.63 percent at Rs.787; and Sun Pharma, 0.47 percent at Rs.610.20.
Among the Asian markets, Japan’s Nikkei closed 1.95 percent up, while Hong Kong’s Hang Seng was higher by 0.41 percent. However, China’s Shanghai Composite Index lost 0.10 percent.
In Europe, London’s FTSE 100 was trading 0.15 percent up and the French CAC 40 Index rose 0.61 percent, while Germany’s DAX Index gained by 0.19 percent.
Source: BD news24
