Sensex, Nifty close at all-time high levels

The stock markets were gripped by euphoria as indices surged on Friday to record all-time highs on expectation that the Bharatiya Janata Party (BJP) is likely to come to power when the poll results are announced on May 16.

The S&P BSE Sensex surged to close at a record high of 22,994.23 points, a gain of 650.19 points or 2.91 per cent. It touched an intra-day high of 23,048.49, up 704.45 points. The previous high was on April 25, when the Sensex had closed at 22,939.31.

According to a Bloomberg Survey of 19 brokers and investment advisory firms, the Narendra Modi-led BJP may get more than 230 seats while the NDA may get 266 seats, close to the 272 mark.

“There was talk in the market that the outcome of the exit poll was leaked and data indicated a lead for the BJP. This caused buying momentum. As buying picked up and initial momentum started, more people sitting on the fence joined the bandwagon and indices surged to all-time high levels,” said Ambareesh Baliga, Managing Partner, Edelweiss Global Wealth.

“In the last couple of months, the market is purely driven by sentiments and market will rally further as the results will be out on May 16. It is basically a news-and-rumours-based rally. The buying momentum is speculative, as no one knows the final outcome. The results can also throw some surprises and investors should be prepared for this,” said Mr. Baliga.

Experts have advised investors to remain 30-40 per cent (of their holding) liquid so that they can take an appropriate decision after the election results are out.

“Markets are doing pretty good and may rise further before May 16,” said Dilip Bhat, Joint Managing Director, Prabhudas Lilladher, adding, “Major part of the elections is over and the market is sensing that there will be a decisive government. This is showing.”

Foreign institutional investors (FIIs) have turned major buyers in the last few days as they are anticipating a strong government at the Centre. According to analysts, the buying was led by domestic institutions, high net worth individuals and it was backed by FIIs. “This kind of movement cannot happen without the involvement of FIIs,” said Mr. Baliga.

Though there was a Modi factor behind this surge, some analysts said that short-covering caused Friday’s rally. “The Nifty was short in futures. Today short-covering took place and this led to buying. Also fresh buying was seen,” said Deven Choksey, Managing Director, K. R. Choksey Shares and Securities.

On the National Stock Exchange (NSE), the 50-share Nifty gained 211.50 points to hit its new all-time high of 6,871.35, before closing at 6,858.80, up 198.95 points or 2.99 per cent.

Rupee gains 3 paise

PTI reports:

The rupee on Friday gained three paise against the dollar to end at 60.04 on persistent selling of the U.S. currency by banks and exporters in view of sustained foreign capital inflows into equity markets.

The rupee resumed slightly lower at 60.09 a dollar against the last closing of 60.07 at the inter-bank foreign exchange market on initial dollar demand from banks and importers. However, it recovered to 59.92 on renewed selling of dollars by banks and exporters, before finally settling at 60.04, showing a marginal gain of three paise from its last close.

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