Equities were on fire on Monday after the spectacular victories by the BJP in the assembly polls in three states.

Hopes that the Narendra Modi government will again return to power in 2024 bringing with it political stability and policy continuity saw the benchmark indices settling at all-time highs and investors becoming richer by over Rs 5.81 lakh crore (trillion).

Records were set on the BSE and NSE: the 30-share Sensex zoomed 1383.93 points, or 2.05 per cent, to close at a lifetime high of 68865.12 after hitting a historic intra-day peak of 68918.22. This was the biggest single-day gain for the index since May 20, 2022.

On the NSE, the broader Nifty advanced 418.90 points, or 2.07 per cent, to its all-time closing high of 20686.80 after hitting 20702.65, intra-day.

The Nifty mid-cap 100 and the Nifty small-cap 100 indices also settled at all-time highs of 43918.60 and 14437.70.

The Nifty Bankex joined the rally as it jumped 3.61 per cent, ending at 46431.40.

All the sectoral indices on the BSE recorded gains with oil and gas rising the most by 3.77 per cent followed by bankex, 3.56 per cent. The power sector index went up 2.99 per cent, financial services rose 2.98 per cent and utilities jumped 2.94 per cent.

Banks and energy stocks were the flavour on Monday’s trade with ICICI Bank leading the list of Sensex gainers as it jumped 4.68 per cent.

``BJP’s win in the three state elections of Madhya Pradesh, Rajasthan and Chhattisgarh is much better than what exit polls suggested and reinforces the consensus expectations of a Modi win 2024 national elections with a greater likelihood of 300-plus seats for the BJP. This boost to the investor sentiment should augur well for domestic cyclical sectors viz. banks, industrial, power, property and mid- caps,’’ analysts at Jefferies said in a note.

The brokerage added that despite BJP’s strong performance in state polls, the tilt to welfare policies would gain momentum in the run-up to April-May 2024 polls.

The upcoming budget may have some large new welfare scheme announcements, similar to the farmer’s direct income transfer announced before the 2019 elections.

On the BSE, the combined market capitalisation also touched an all-time high of Rs 343.48 lakh crore. The combined market valuation of all listed companies on the exchange had hit the $4 trillion mark for the first time last Wednesday.

Some experts said that after the five-day rally, the stocks could be in for some correction. The attention will now shift to the monetary policy committee (MPC) meeting on Friday, global cues and corporate earnings in the short to medium-term.

``This huge rally has landed both Nifty and Bank Nifty in the overbought territory, and the market may soon see some profit booking. However, every dip should be seen
as a buying opportunity as post the state-elections result, Nifty is all set for a big rally till the Lok Sabha elections of 2024,’’ Sheersham Gupta, director and senior technical analyst at Rupeezy, said.

Adani stocks

The BJP wins rubbed off on the Adani group stocks, which rose up to 9.43 per cent as their market capitalisation crossed the Rs 12 trillion mark in intra-day trades.

The m-cap had crashed to Rs 6.8 lakh crore in February 2023 weeks after the release of the Hindenburg report from Rs 19.18 lakh crore just prior to the release of the report on January 24. The m-cap presently is, however, far below the all-time high of Rs 25 lakh crore.

Among the group stocks, Adani Green Energy gained the most as it jumped 9.43 per cent or Rs 96.80 on the BSE to close at Rs 1123.35.

It was followed by Ambuja Cements which rose 7.32 per cent, Adani Enterprises which rose 7.07 per cent, ACC (6.26 per cent), Adani Ports (6.19 per cent) and Adani Power (5.54 per cent).