Indian benchmark indices — BSE Sensex, and Nifty50 — clocked their biggest one-day rally ahead of Lok Sabha elections results since 2009.
The 30-stock Sensex index zoomed 2,507 points, or 3.4 per cent, to end at 76,469 levels, while the Nifty50 jumped 733 points, or 3.25 per cent, to close at 23,264.
The last time the benchmarks logged their biggest single-day rally ahead of election results was in 2009, when they jumped 2.46 per cent.
The benchmarks also hit their respective record highs of 76,739 and 23,338, respectively.
In the broader markets, the BSE MidCap, and SmallCap indices climbed 3.54 per cent and 2.05 per cent, respectively.
Among individual stocks, Adani Ports, Shriram Finance, and Power Grid were the top performers in early trade, each climbing 6-9 percent.
Shares of Adani Ports gained nearly 9 percent as the company’s wholly owned subsidiary Adani International Ports Holdings Pte Ltd (AIPH) signed a 30-year concession agreement with the Tanzania Ports Authority to operate and manage Container Terminal 2 at the Dar es Salaam Port in Tanzania.
According to experts, market volatility observed in May is expected to subside after the election results are announced on June 4. “Our markets are expected to be vulnerable until the election outcome, and volatility is likely to remain high during this time,” said Sameet Chavan, Head Research, Technical and Derivative, Angel One. At 9.17 am, India VIX was down 17 per cent at 20.6.
Post-election, the market’s focus will shift to the first 100 days of the new government and the union budget, said analysts.
“After a huge gap up opening Nifty can find support at 23,200 followed by 23,100 and 23,000,” said Deven Mehata, Research Analyst at Choice Broking. “On the higher side, 23,650 can be an immediate resistance, followed by 23,700 and 23,800,” he added.
Stock Market View | Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services
Fundamentals, technicals and sentiments turning favourable at the same time is rare in the market. This is what has happened now. The market went into the big event, elections, very light with Nifty correcting around 600 points from the May highs. Profit booking also happened on a large scale. The short position in the market also is high. All these are going to change dramatically. DIIs, HNIs, and retail are all going to turn buyers. Short-covering can add to the momentum.
The rally is likely to be led by largecaps. Stocks like RIL, ICICI Bank, HDFC Bank, Kotak Bank, Axis Bank, Bajaj Finance, Bharti Airtel, L&T, M&M, Tata Motors, Bajaj Auto, Eicher Motors are fundamentally strong largecaps with potential to lead the rally. IT stocks like TCS, Infy, HCL Tech, Coforge, Persistent and L&T Tech offer contrarian buying opportunities.
The GDP numbers which came on Friday were better than expected with 8.2% growth. This will provide fundamental support to the market. S&P’s upward revision of India’s rating outlook also is positive.
