The bourses witnessed a bull run in early trading on Friday as trends of the poll results started coming thick and fast, indicating a clear winner in the BJP-led National Development Alliance (NDA).
This saw S&P BSE Sensex go beyond 25000 and Nifty cross the 7500.
Stock indicesscaled record highs as the BJP-led NDA looked certain to form the next government. The Sensex opened 366 points higher and surged 1470 points [intra-day] from its previous close to 25375, its highest mark. The NSE Nifty, too, surged 400 points to scale 7563.50 amidst hectic buying in stocks.
However, once the trends were clear, stock prices corrected during the day with heavy profit-booking as huge positions were built in the last 10 days.
“The results were better than expected. No one thought that the NDA would go to 330 plus levels. On the higher side, they were expected to get 270. And, when they surpassed this number, it was a landslide. Markets gave thumbs up. Huge positions were built on hopes in the past few days, and when the news was out, market players booked profit and made good money,” said Ambareesh Baliga, Managing Partner, Edelweiss Global Wealth.
“FIIs were major sellers while domestic institutions and others were the buyers. FIIs decided to book profit as they built up huge positions. Now that the market has entered into a bull phase, it will rise further once policy decisions are made and budget is announced,” said Pramit Brahmbhatt, CEO, Veracity Financial Services.
With profit-booking, the Sensex closed at 24121.74, up 216.14 points, as compared to its previous close of 23905.60. Similarly, the Nifty closed at 7203 with a gain of 79.85 points or 1.12 per cent. Despite this, both the benchmark indices closed at their highest level so far.
In 2009, when the UPA got the mandate to rule again without the support of Left parties, the Sensex had gained 2110 points and hit the circuit which forced the exchange to halt trade. Intra-day, the Sensex moved 804 points which indicated that markets like stability.
“For the first time, the nation has voted for progress. We are now looking at least five years of a stable government that is pro-business. Year-to-date India has attracted $6.5 billion in FII equity flows but after this result, that number could be four times more,” Gautam Y. Trivedi, Managing Director & Head of Equities, Religare Capital Markets.
“This is an unprecedented election result and something the markets are rightly rejoicing. A strong stable mandate was the need of the hour . There is well grounded expectation that the new government will usher in strong pro-reform policies,’’ he added.
