Dalal Street declares Narendra Modi as the winner

Mumbai: Registering their biggest single day gain since September 2013, the Indian equity markets zoomed to a record high on strong speculation that the BJP led National Democratic Alliance (NDA) would be able to garner comfortable majority to form the next government. The Sensex scaled above its psychological barrier of 23,000 level rallying 704.45 points in the intra-day trade before closing the day at 22,994.23, clocking a gain of 650.19 points or 2.91 per cent. The 50-share broader Nifty climbed 198.95 points or 2.99 per cent to close at a new high of 6,858.80.

With just one week left for the announcement of poll results, market experts pointed out that upbeat traders and investors are trying to grab whatever they missed during the last two months of rally in the stock market. According to market sources, information available with traders suggest that the NDA could win around 260-270 seats. This acted as a major trigger for the hectic buying on Friday. According to foreign brokerage firm CLSA, bets worth $5 billion have been placed on the election outcome by bookies.

“As the results day is inching closer, the markets are rallying on anticipation of a favourable outcome. In spite of the rally so far, most cyclical sectors are still trading well below their average valuations and in a longer economic upturn scenario, valuations still leave enough room for healthy upsides as GDP growth and consequently earnings growth in cyclical sectors continue to improve,” said Dinesh Thakkar, chairman and managing director, Angel Broking. Foreign institutional investors (FIIs) purchased shares worth Rs 1,268.78 crores, according to the provisional data from the stock exchanges.

“There was huge short covering in the derivatives markets that helped markets to register impr-essive gains,” pointed out Deven Choksey, managing director, K.R.Choksey Securities. According to him, investors should stick to quality stocks instead of getting into stocks with weak fundamentals. Among the BSE sectoral indices, the BSE Bankex was the biggest gainer rallying 5.34 per cent followed by realty, power and the PSU index, which gained 4.38 per cent, 4.12 per cent and 3.57 per cent respectively.

“The markets would react to exit polls numbers on May 13,” said Sanjeev Zarbade, vice-president, research, private client group, Kotak Securities. The Election Commission has allowed media and research organisations to announce exit polls after 5.30 pm on May 12.