It was a day of extreme volatility for the stock markets on Monday when the poll results for the key state of Gujarat along with Himachal Pradesh were scheduled to be announced. The benchmark Sensex fell nearly 870 points during the morning trading session as early trends showed that it could be a close fight between the Congress and the ruling BJP.
The 30-share barometer opened at 33,364.52, but immediately fell to a low of 32,595.63 – 867 points lower than Friday's close of 33,462.97. However, as the trading session progressed and it emerged that the BJP will win the elections in both the states, the indices recovered their losses and ended in the green.
The Sensex ended the day at 33,601.68, up 138.70 points or 0.41%. The broader Nifty of the National Stock Exchange (NSE) settled the day at 10,388.75, up 55.50 points or 0.54%.
Global financial major Nomura, in a note on Monday, said that while the election results does not change its economic outlook, it still expects some shades of populism to emerge and remain positive on the medium-term outlook.
Incidentally, this is not the first time that the equity markets have witnessed extreme volatility on account of political reasons. On May 18 2009, when the United Progressive Alliance (UPA) returned to power for the second time, the benchmark indices hit their upper circuit twice in a single day.
Meanwhile, a total of 1,437 stocks gained ground on BSE on Monday as against 1,209 declines. The Sensex pack saw M&M, Sun Pharmaceuticals, State Bank of India, Wipro, ICICI Bank and Maruti Suzuki India leading the gainers' pack.
