MUMBAI: India's stock markets surged to record highs on Monday as exit polls indicated a third term for Prime Minister Narendra Modi-led National Democratic Alliance (NDA). Benchmark indices Sensex and Nifty opened at unprecedented levels, surging nearly 4% in early trade, with bullish sentiment dominating D-Street following Saturday's exit poll results.
The BSE Sensex opened 2,621.98 points, or 3.55%, higher at 76,583.29, while the NSE Nifty 50 opened at 23,337.90, up 807.20 points, or 3.58%. After this record opening, the market witnessed some profit booking.
In the broader market, the Nifty Smallcap 100 and the Nifty Midcap 100 index also rallied nearly 3% each. Sectorally, all indices were trading with a gain of 1-4%, with the Nifty PSU Bank, Nifty Oil & Gas and Nifty Auto leading the rally.
Among the stocks, all 30 constituents of Sensex were trading in green. Powergrid, NTPC, L&T, M&M, and SBI were up 5-8% each.
"Fundamentals, technicals and sentiments turning favourable at the same time are rare in the market. This is what has happened now. The market went into the big event, the elections, very light, with the Nifty correcting around 600 points from the May highs. Profit booking also happened on a large scale. The short position in the market is also high," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
"All these are going to change dramatically. DIIs, HNIs, retail...are all going to turn buyers. Short-covering can add to the momentum. The rally is likely to be led by large caps. Stocks like RIL, ICICI Bank, HDFC Bank, Kotak Bank, Axis Bank, Bajaj Finance, Bharti Airtel, L&T, M&M, Tata Motors, Bajaj Auto, and Eicher Motors are fundamentally strong largecaps with the 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 out 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 is also positive,” added Vijayakumar.
According to market experts, there are now indications that the Prime Minister-led NDA alliance will win more than 350 seats in the Lok Sabha elections. Market experts believe the headline indexes will scale to new peaks this week after a choppy streak last week. Sensex and Nifty ended the week down nearly 2% at 73,961 and 22,531 as investors preferred to play safe ahead of D-Day.