Mumbai: The BSE Sensex soared over 436 points in late morning deals today while the broader Nifty crossed the 10,900-mark after the BJP looked on course to emerge as the single largest party in Karnataka.
The BJP led in 104 constituencies, while the ruling Congress was ahead in 75 seats, according to trends.
“The major thing investors look out for is a stable government and a decisive mandate is something markets always take positively. Going by last few weeks’ trends, markets were factoring in a decisive win for BJP,” said Siddhartha Khemka, head of retail research at Motilal Oswal Securities.
Sensex has so far touched a high of 35,993.53 points and a low of 35,498.83 points during the intra-day trade.
"Early trend shows that the possibility of hung assembly has reduced. Markets could react positively if this trend gets confirmed later. However, beyond today what will drive India's equity markets in the near term is not the outcome of these elections or any political issues, but the country's macros," said Deepak Jasani, Head of Retail Research, HDFC Securities.
Geojit Financial Services Chief Market Strategist Anand James said that high voter turn out in Karnataka elections has brought in risk capital into the market. "Much of such money had earlier gone into index and a few set of stocks, but mid and small cap indices looks to have caught up today, which is also a testimony of positivity by way of increased earnings visibility," James said.
On May 14 -- the previous trade session -- both the key indices closed on a flat-to-positive note as caution prevailed ahead of the Karnataka assembly election results and a rise in the April wholesale inflation rate.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 717.99 crore while domestic institutional investors (DIIs) bought shares worth Rs 687.23 crore yesterday, as per provisional data.
The 30-share Sensex was trading higher at 35,993.53, showing a gain of 436.82 points, or 1.22 percent.
The broader Nifty-50 index too trading at 10,929.20, up 122.60 points, or 1.13 percent.
Major gainers were Tata Steel 2.38 percent, Kotak Bank 2.17 percent, Yes Bank 2.13 percent, Power Grid 1.99 percent and HDFC Bank 1.62 percent.
Bonds and the rupee hit multi-month lows in early trade, as global crude oil prices inched up and the local inflation print came in higher than expected.
The 10-year benchmark bond yield rose 7 basis points to 7.90 percent, its highest in nearly 33 months, while the rupee fell to a near 16-month low of 67.7975 against the dollar before recovering sharply to 67.5350 on likely intervention by the central bank.
Government data on Monday showed India’s annual retail and wholesale inflation accelerated in April, mainly due to higher fuel and food prices.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth Rs 717.99 crore on a net basis, while domestic institutional investors (DIIs) bought equities to the tune of Rs 687.23 crore yesterday, provisional data showed.
Asian stocks fell as investors remained cautious about key economic and political risks, while supply concerns kept crude oil prices near 3-1/2-year highs.
US stock indices posted modest gains yesterday, with the Dow ending higher for the eighth session in a row on signs of easing trade tensions between the US and China.
HUL touches 52-week high on strong Q4 show
Shares of Hindustan Unilever Ltd (HUL) climbed more than 2 percent and touched their 52-week high level in morning trade today after the company posted strong earnings for the quarter ended March.
On Monday, the company reported 14.2 percent increase in its standalone net profit to Rs 1,351 crore for the fourth quarter ended 31 March, driven by a strong double digit volume growth.
Reacting to the numbers, the stock of the company opened on a bullish note at Rs 1,504.95, then jumped 2.54 percent to touch a high of Rs 1,543.25 on the BSE.
Similar movement was seen on the NSE as well, where the stock opened at Rs 1,530, then soared to its 52-week high of Rs 1,542.40, up 2.58 per cent over its previous closing price.
HUL's net sales during the quarter under review stood at Rs 9,003 crore compared to Rs 8,773 crore in the same quarter previous fiscal.
Meanwhile, the board of the company has recommended a final dividend of Rs 12 for the financial year ended March 31, 2018 on equity shares of Re 1 each.
Re recovers sharply
The rupee recovered sharply on Tuesday to rise on suspected intervention by the Reserve Bank of India (RBI) after falling to a near 16-month low in early trade.
State-run banks were seen selling dollars around 67.67 level, dealers said. The RBI typically intervenes in the foreign exchange market via state banks.
The central bank likely sold dollars via state banks at 67.67 level to stem the rupee fall, said dealers.
The rupee sharply retraced all its losses to rise to the day’s high of 67.5350 to the dollar, after falling to 67.7975 in early trade, its weakest since Jan. 31, 2017. It had closed at 67.50 on Monday.
“This time the intervention from RBI seemed quite decisive,” said a dealer at a foreign bank.
-- With agency inputs
Updated Date: May 15, 2018 13:17 PM