Nifty hits record high, Sensex rallies over 600 pts as stock markets cheer Modi win in UP
Stock markets gave an emphatic thumbs up to BJP’s stellar victory in the UP state elections, with NSE Nifty scaling the crucial 9,000 resistance mark and hitting an all-time high of 9,122.75 points. BSE Sensex rallied over 600 points to the day’s high of 29,561.93 points.
Almost all the major sectoral indices were trading in green, with the gas distribution stocks up on the hopes of the government’s push for LPG connections in every home and augmented city gas pipeline network.
Bank stocks rose on the hopes of the government waiving farm loans, as was promised by Prime Minister Narendra Modi during the election campaigns, on expectations that the government would make good lenders’ losses from waiving off repayments of loans which would be not recoverable anyway. Bank Nifty hit a record high of 21,274.45 points, and was trading up 2% from the previous close.
Lenders ICICI Bank, HDFC and Yes Bank were three of the top five gainers on Nifty, rising 5%, 3.17% and 2.77%, respectively. While the cement and infrastructure companies Grasim and Larsen & Toubro were the other two top gainers, rising 3.1% and 2.8%, respectively, given the BJP government’s well known emphasis on developing infrastructure and building highways.
However, the markets began to slip from the day’s high later. Experts say that any rally in stocks would be momentary and that the markets would continue to be driven by the fundamentals such as the pace of the economic reforms at the centre, corporate earnings, valuations and other such factors.
Similarly, analysts caution against letting the sentiments loose into the markets and buying heavily, as any rally based on election results would most likely be short-lived. Post any short-term movement, the markets would likely come back to the usual trajectory, and would continue to be guided by the fundamentals, such as progress of the economic reforms, analysts say.
“Any reaction either on the upside or on the downside based only on the elections is going to be very very short-lived,” Sunil Singhania, CIO – Equity Investments, Reliance Mutual Fund, said in a recent interview to CNBC TV18.