Modi magic: Sensex at record closing high ahead of exit polls

The Indian stock markets today ran up at a scorching pace to end about 2.5 percent up as investors bet on a comfortable majority for the BJP-led NDA.

The Sensex closed at 23,551, up 556 points, and the Nifty at 7014, up 155 points. Among sectoral indices, Bank Nifty also hit a record closing high as investors turned bullish about a revival in the economy which could help improve bank finances and bring down their bad debts.

Exports, however, are of the opinion that the rally may only be the beginning of a major bull run.

“I would just call it a good start. I don’t think it has factored in anything. All it may have factored in is that the market participants have woken up that there is an event happening, which has certain visibility, and people were ignoring it. If you look at the last one month, India was ranked 19th out of 21 emerging markets in its performance,” Samir Arora of Helios Capital told CNBC-TV18 in an interview today.

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Among stocks that gained the most on the BSE are Torrent Power up 18.38 percent, IRB Infra up 13 percent, Coal India up 7 percent and Jaiprakash Associates up 6.17 percent.

ITC and HDFC Bank were the key contributors to the Nifty’s gain. In the last three months, the index has risen over 1000 points, on the overall feel good factor in the economy and expectation of a change at the Centre after the polls.

Earlier, Deven Choksey had told CNBC-TV18 that said one has to approach the market in a stock-specific manner. Even while booking profits, one will have to look at individual stocks, he said.

15:10 pm: Modi won’t undertake reforms in a hurry, says Jhunjhunwala

About 20 minutes to go and the markets are pushing further and further ahead: The Sensex is up 555 points at 23, 550, while the Nifty is at 7 014, up 150 points.

It’s the last day of India’s mammoth voting exercise, and investors are already betting that the BJP-led NDA will cruise to victory.With exit polls out in the evening, excitement is building up to fever pitch.

Heaven help if those expecations are crushed on May 16: brace yourself for a potential crash in stock prices if the BJP wins less than 220 seats.

Rakesh jhunjhunwala, India’s best known stock investor, has said that he expects the BJP-led NDA will win a majority in an exclusive interview to CNBC TV18.

In any case, he notes, he believes the markets will get “a government they like”.And who do the markets like? By all accounts, it seems to be the BJP and its allies.

Of course, even if Modi does win, there’s no guarantee that the economy will turnaround in a hurry. Jhunjhunwala told CNBC TV18 that he doesn’t expect Modi to undertake reforms quickly, instead, Modi is likely to study all the issues dogging the economy before taking a decision, noted Jhujhunwala.

Are the markets concerned? Not in the least. They’re running ahead like there’s no tomorrow.If the exit polls suggest a Modi wave this evening, then markets could surge even further this week.

Of course, we have to remind you, don’t put blind faith in the exit polls. They were wrong the last two times and history could very much repeat itself.

14:14 pm: Nifty crosses 7,000 as investors bet on comfortable majority for NDA

The expectation that a stable government will be formed at the Centre after the elections pushed the Nifty to hit a record of 7,000 points today. The Sensex was up 470 points to 23,468.

ITC and HDFC Bank were the key contributors to the Nifty’s gain. In the last three months, the index has risen over 1000 points, on the overall feel good factor in the economy and expectation of a change at the Centre after the polls.

Commenting on the market rally Deven Choksey said one has to approach the market in a stock-specific manner. Even while booking profits, one will have to look at individual stocks, he told CNBC-TV18.

UR Bhatt of Dalton Capital, meanwhile, told the TV channel that the potential outcome of the exit polls has already been factored in by the market. If the NDA wins 240-250 seats, it will not be difficult for the alliance to form a government. But if it gains only 220 seats, there will be a sharp correction.

A run-away rally is possible only if the NDA gets more than 300 seats.

Of the fifty Nifty stocks, 12 hit 52-week highs and of the 30 Sensex shares, 11 hit 52-week highs. As many as six of the 12 Bank Nifty stocks also hit 52-week highs.

Here is the price movement of the top Nifty gainer ITC:

1:20 pm: Expect NDA to get majority, says Jhunjhnwala, one of India’s best known stock investors

We’re approaching lunch time and the markets are still in celebratory mood. Adding to that sentiment, Rakesh Jhunjhunwala, often described as India’s Warren Buffett, said that he expects the BJP-led NDA to win a majority in the Lok Sabha elections that end today, according to a CNBC TV18 exclusive.He also said that India had all the ingredients for growth and investments in equities.

Indeed, exit polls are due later today and the markets seem to be already betting on a BJP victory. The Sensex continues to fly high, up more than 400 points at 23,481, while the Nifty is at 6975, up 116 points.

As we mentioned in our post below, Macquarie Research estimates a base case of 220-240 seats for the NJP-led NDA. We’ll soon find out. To get a majority, the NDA needs to win 272 seats.

Also in the markets, the NSE’s volatility index, or India VIX, hits its highest level since March 11, 2009, and is headed for a fourth consecutive session of gains ahead of exit poll results later in the day, according to a Reuters report.India VIX measures the cost of protection via options and is seen by some investors as a “fear” gauge.

Be prepared for more volatility. It’s going to be a bumpy ride.

12:15 pm: As Varanasi votes, are investors betting on BJP winning around 230 seats?

We’re at the halfway mark for Monday trading and investors continue to feel buoyant ahead of the exit polls later today. The Sensex is trading at 23,398, up more than 400 points and continuing to break new records, while the Nifty is at 6,971.The rupee is slightly weaker at 59.75 but still below 60 against the dollar.

What are investors so ecstatic about? Opinion polls since the start of the year suggest that investors are betting on the BJP-led NDA will come to power. A Macquarie report suggests that outcome could lift markets higher by another 5-10 percent.The research house thinks the markets are pricing in around 230 seats, which is also Macquarie’s ‘base case’ view.

The report suggests the May 16 results may be more definitive this time around since ’there is a clearanti-incumbency trend at the centre and BJP-led NDA is the only viablealternative."

Well, even if the exit polls suggest that outcome, don’t get too carried away. Remember that exit polls were flat-out wrong in 2004 and 2009.

11:33 am: Way to go: Sensex may hit 30,000, rupee 57 after the elections

Terming the Indian equities a perfect bull market, a section of the market experts are pegging higher heights for the benchmark indices and in turn the rupee.

Nirmal Jain of India Infoline told The Economic Times that the Sensex is likely to hit 30,000 by December if the elections throw up a stable government at the Centre.

“If Modi just does initial few things right after coming to power, then further expectations will help markets rally. So the expectations could be a game-changer for the markets,” he told the newspaper.

According to him, the markets will correct, not crash, if the NDA wins 225 seats. A crash is likely if the BJP alliance falls short of 225 seats.

According to Gautam Shah of JM Financial, the present rally will continue for the many months. Talking to CNBC-TV18, he advised investors to stay very focused, disciplined and make stock-specific investment decisions. He has also warned that the market is likely to remain volatile for some time.

Jayesh Mehta of BofAML, meanwhile, said the rupee will likely hit 57 against the dollar, if the flows continue to be as strong after the elections and the RBI stays away from the market. The Indian unit, however, is likely to stabilise around 58-59 level alter.

10:45 am: Financial astrologer says BJP’s Modi only has 50 percent chance of becoming PM

Well, this is interesting. A financial astrologer, Ashok Motiani, of indianastrologermarket.com told CNBC TV18 that the BJP’s candidate, Narendra Modi, has just a 50 percent chance of becoming prime minister. “If I look at Narendra Modi’s horoscope, he has a 50:50 chance of becoming PM,” Motiani said.

If you’re into planetary positions and that jazz, that news might just shock you.It will also be disappointing for those betting heavily on Modi coming to power. A CLSA report, quoting a news report, says that bets worth $5 billion have been placed on the election outcome, with 84 percent of the bets in favour of a Modi win.

In addition, Motiani had this bit of advice for investors: with markets at record highs, it’s better to sell now and buy later (in August).

Markets, not surprisingly, are not in the mood for listening to any glum news. Both the Sensex and Nifty are as high as kites: the Sensex is currently trading at 23,330 while the Nifty is at 6,952 – at record highs.

The rupee isn’t doing too badly either: it’s still a steady 59.68, trading at levels not seen since early last year.

10:15 am: Markets red hot; Reliance Industries hits over 3-year high

Shares of Reliance Industries rose about 4 percent today after the company said over the weekend that it, along with its partners, have issued an arbitration notice to the government over delay in the decision to increase gas price.

According to CNBC-TV18, the stock crossed Rs 1,000 market for the first time after 2011. At 10:15 am, the stock was at Rs 1,036.40 up 3.92 percent.

Here is the price movement from 1 January:

9:30 am: Markets on fire; Sensex hits another record high

The Indian stock markets continued to hit record highs ahead of the exit poll results expected to be out today evening. Investors are buying ferociously expecting a stable government led by the BJP will assume power after the elections.

At 9:30 am, the Sensex was at 23,299.81, 305 or 1.33 percent and Nifty at 6,943.70, up 84.90 or 1.24 percent. The surge was broad-based but the banks seem to the favourite of the investors as the Bank Nifty which rose to 13,986 was the top gainer among the sectoral indices.

The market had hit record highs on Friday and the PTI reported that the market valuation of top seven Sensex firms advanced by Rs 84,494.52 crore last week, with RIL and ONGC emerging as the biggest gainers.

In line with the equities, the rupee also gained strength as foreign investors pumped in funds into the Indian markets. The Indian unit was at 59.62 against the dollar.

Sunil Singhania of Reliance MF todl CNBC-TV18 that the markets are rising due to the improvement on macroeconomic improvement. He said now the market is entering range where profit growth can be more than 18-20 percent. Benign interest rate environment can help profit growth. “We are optimistic, going forward, macro eco and corp fund …will propel equity returns above 15 percent,” he told the TV channel.