Stocks indices surged to close at record highs and the rupee strengthened further against the US dollar on Monday following BJP winning clear mandate in major states to form governments.
The benchmark Bombay Stock Exchange (BSE) 30-share Sensitive Index (Sensex) closed at 21,326.42 with a gain of 329.89 points or 1.57 per cent.
The Rupee strengthened to 61.13 per US dollar at the close compared to its previous close of 61.41on Friday last. It touched an intra-day high of 60.84 per US dollar in early trades, in the foreign exchange market.
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Capital goods stocks led the rally with a gain of 3.14 per cent followed by banks 2.93 per cent, realty 2.61 per cent, oil & gas 1.71 per cent, power 1.59 per cent and automobiles 1.37 per cent. Except consumer durable stocks which lost by 0.11 per cent, all sectors ended in the positive territory.
BSE 100 gained by 1.51 per cent, BSE 200 was up by 1.39 per cent and BSE 500 gained 1.29 per cent. Mid cap stocks, however, gained 0.48 per cent and small cap was up by 0.39 per cent.
On the National Stock Exchange (NSE), a broader 50-share Nifty was up by 104 points or 1.66 per cent to close at 6363.90. Surpassing all previous highs, in the intra-day, the Sensex moved to a record high of 21,483.74 points, or 2.3 per cent gain, while the Nifty touched 6415.25, a gain of 2.5 per cent.
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“The market indices touched new highs expectedly after the mandate given to BJP to form new governments,” said Deven Choksey, Managing Director, K.R. Choksey Share and Securities. Market, according to him, here onwards, would remain positive, with genuine buying interest coming from long-term investors.
The mandate, which the voters have given this time around to the main opposition parties compared to other independent candidates, eliminates the possibility of horse-trading and it will help to form stable governments, said Mr. Choksey, adding, “This should result in higher confidence from local and global investors, ultimately resulting into better investment climate in the country. Capital market always wanted this clarity to sustain the investment interest.”
“This is euphoria based on the anticipation of a stable and strong government post next Parliamentary elections,” said Sudip Bandyopadhyay, Managing Director and Chief Executive Officer, Destimoney Securities. He added:
“This is also supported by global news flow regarding continuance of easy money and possible improvement of global macro-economic fundamentals. The buoyancy in the market is expected to continue for some more time before corrections and profit booking start.”