Emerging market stocks and currencies rose on Monday, with equities cheering exit polls suggesting a victory for the ruling party in general elections.
Both the Sensex and the Nifty recorded all-time highs at the bourses today.
Benchmark Sensex zoomed over 1,422 points and the NSE Nifty surged 421 points after most exit polls showed that the Narendra Modi-led NDA is returning to power with a thumping majority in the Lok Sabha elections.
The 30-share index ended 1,421.90 points, or 3.75 percent, higher at 39,352.67. During the day, the gauge hit a high of 39,412.56 and a low of 38,570.04. On 16 April this year, the Sensex jumped 370 points or 0.95 percent to close at a new high of 39,276.
In a similar movement, the broader NSE Nifty soared 421.10 points, or 3.69 percent, to 11,828.25.
The previous record was set on 16 April, 2010 at 11,810.95.
Top gainers in the Sensex pack include SBI, IndusInd Bank, Tata Motors, L&T, Yes Bank, HDFC, M&M, Maruti, ONGC, RIL, ICICI Bank and Axis Bank, rising up to 8.64 percent.
On the other hand, Bajaj Auto and Infosys ended in the red.
The broader BSE midcap and smallcap indices ended in line with benchmarks, rallying up to 3.57 percent.
"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," said Joseph Thomas, Head Research- Emkay Wealth Management.
"What would help the markets sustain the momentum is 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-organisation of the banking system," he added.
Most exit polls on Sunday forecast another term for Prime Minister Narendra Modi, with some of them projecting that BJP-led NDA will get more than 300 seats to comfortably cross the majority mark of 272 in the Lok Sabha.
The results of the seven-phase polls will come out Thursday.
"The rise in main indices is justified considering the numbers that have come in the exit poll," said Rusmik Oza, Head of Fundamental Research, Kotak Securities.
Though investors are happy with the idea of continuity, they felt that a lot of the work that has been done by the government to generate economic growth has not yet been felt. They said the second five-year term would give Modi the opportunity to implement those reforms and deliver on growth.
Expect Nifty 50 to retest the recent high of 11, 850 before May 23. Break out into a new zone would depend on whether BJP on its own is able to secure more than half the seats, Oza added.
“I would expect more over the next five years,” said David Cornell, Chief Investment Officer at Ocean Dial Asset Management.
“A lot has been done but a lot more needs to happen in terms of the judiciary, generating employment growth, public sector divestment, attracting foreign investment, improving the fiscal deficit. So there is an awful lot more that needs to be done.”
Meanwhile, market regulator Sebi and stock exchanges have beefed up their surveillance mechanism to check any manipulative activities in the market this week in view of the high-octane election-related events lined up.
The rupee jumped 1% to 69.53 per dollar and was on course to post its biggest one-day gain in five months, while stocks in Mumbai surged more than 3%, set for their best intraday gain since the first quarter of 2016.
On the currency front, the rupee appreciated by 68 paise to 69.54 against the US dollar.
Brent crude, the global benchmark, was trading at 73.22 per barrel, higher by 1.40 percent.
-- With inputs from agencies
Your guide to the latest cricket World Cup stories, analysis, reports, opinions, live updates and scores on https://www.firstpost.com/firstcricket/series/icc-cricket-world-cup-2019.html. Follow us on Twitter and Instagram or like our Facebook page for updates throughout the ongoing event in England and Wales.
Updated Date: May 20, 2019 16:23:59 IST