The exit poll euphoria catapulted the Indian equities markets to record levels on Monday, the highest in the last 10 years with both the benchmark indices scaling new heights. The BSE Sensex closed the day 1,421.90 points higher at 39,352.67 points.
Sunday’s exit poll results clearly predicted the possibility of the BJP-led NDA forming the government at the Centre for another five-year term.
Aasif Hirani, Director, Tradebulls Securities said Sensex and Nifty saw the biggest single day gain after 2009 with the Nifty ending at a record high on exit polls outcome.
The BSE Sensex, which opened at 38,701.18, ended the day’s trade at 39,352.67, higher by 1,421.90 points or 3.75 per cent from the previous day's close of 37,930.77 points. The Sensex touched a high of 39,412.56 points during the day and hit a low of 38,570.04 points in the day’s trade.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day’s trade 421.10 points or 3.69 per cent higher at 11,828.25 points.
"The domestic equity markets witnessed unprecedented and remarkable surge, across all sectors and segments, after the exit polls indicated a higher probability for the current dispensation to come back to power with a clear majority. What would help the markets sustain the momentum are factors that are fundamentally important, like decisive policy initiatives from the new government, faster land and labour reforms, and also the unfinished task of quick consolidation and re-organization of the banking system,” said Joseph Thomas, Head Research- Emkay Wealth Management.
“It is pertinent to note that global factors would also come to play sooner than later, the factors which cannot be overlooked are the impact of the trade and tariff war between the US and China, the developments in the Gulf Region and the prospects of a gradual slowdown in the global economy,” he added.
“All sector indices ended in green today led by rally in Auto and Bank stocks. Bank Nifty surged over four per cent to hit a new high today while the PSU Bank Index outperformed indices, it has posted sharper gains over 7 per cent. Mid Cap and Small Cap Index also participated in the rally contributing average 3.55 per cent gains,” Hirani said.
The Rupee also jumped against the US dollar settling at 69.66 after closing yesterday at 70.29.
All the indices ended in gains. The sectors, which gained maximum on Monday’s trade are banking, capital goods, auto and oil and gas.
“Today, no brainer, banking index hastened at record highs and there was massive buying interest seen throughout the day across the broader markets. Since last few days, we have been advising accumulating marquee names in this recent decline and we were hopeful of a positive reaction," said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking.
"This strategy seems to have worked well as we saw stellar moves in so many pockets, especially the ‘Mid Cap’ Index, which had given some early signs of completing its time-wise as well as price-wise correction phase. In line with our expectations, the positive outcome resulted into a complete gush in so many midcap counters, who had underperformed significantly over the past few months,” he added.
“The markets seem to have almost fully discounted the outcome of final election results. Institutional buying was seen on Monday (reflected in large cash market volumes of Rs.44,000 crore plus), which triggered some amount of short covering. Over the next three days the markets could look up to corporate results and/or global developments. For a large change in inflows, key cabinet berth allocation and initial policy announcements will be keenly awaited,” said Dhiraj Relli, MD & CEO, HDFC Securities.
The major gainers in Monday’s trade were IndusInd Bank, State Bank of India, Tata Motors, Tata Motors–DVR, Yes Bank and Larsen and Toubro.
There were only two losers in Monday’s trading session: Bajaj Auto and Infosys.