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regular-article-logo Friday, 22 November 2024

Sensex, Nifty leap on exit poll euphoria indicating Narendra Modi's return to power

The all-round rally, which was expected, led to investor wealth zooming ₹13.78 lakh crore as investors queued up for the stocks of those sectors that could benefit from the next government

Our Special Correspondent Mumbai Published 04.06.24, 08:58 AM
Representational image

Representational image Sourced by the Telegraph

Stocks defied gravity to log their best gains in more than three years with the BSE Sensex climbing 2507.47 points or 3.39 per cent to close at record 76468.78 points and the NSE Nifty vaulting 733.20 points to settle at 23263.90 after exit polls indicated the return of Narendra Modi with a big win.

The all-round rally, which was expected, led to investor wealth zooming 13.78 lakh crore as investors queued up for the stocks of those sectors that could benefit from the next government.

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Adani group stocks regained their pre-Hindenburg mojo when their combined market capitalisation stood at over 19.42 lakh crore as all of them ended in the green.

On January 23, 2023, a day before the US short seller’s report was released, their market cap stood at 19.2 lakh crore.

Investors were also chasing PSU stocks particularly the state-owned banks. This was reflected in the Nifty PSU Bank index which rocketed more than 8 per cent.

Apart from banks, utilities, oil, energy, capital goods and realty stocks witnessed brisk buying.

The exit polls that were released on Saturday showed the return of the NDA government with a thumping majority, driving expectations that the next government will be able to push through various reforms.

Experts said if the NDA is able to get more than 400 seats, the current rally will get a greater momentum.

On the other hand, if the ruling coalition is able to obtain around 360 seats as projected in the exit polls, there could be some moderation.

If the tally falls below 300, a correction is expected.

The strong GDP data for 2023-24 — a growth rate of 8.2 per cent — and for the fourth quarter — a growth rate of 7.8 per cent — was another reason for the rally.

“I have witnessed bulls being slaughtered and taken to the cleaners in 2008 and 2009. This time around, a similar fate could await the bears. Most on the street were pessimistic about Narendra Modi’s chances or were sitting on the sidelines,” Vikram Kasat, head-advisory, Prabhudas Lilladher, said.

“Now, very few will have the courage to participate on the upside. People will continue to clamour for a correction, but I believe every dip will be bought into.

“The month of June could be a defining one for the bulls, so one should make the most of this opportunity and stay a bit greedy.

“Last month, I kept saying ‘buy the dip’, this month’s slogan is going to be ‘ride the wave’,” Kasat said.

As expected, the euphoria over the exit polls had a positive rub-off on the bond and forex market.

Yields on the benchmark 10-year paper slid to 6.94 per cent, its lowest closing level in more than two years against the previous close of 6.98 per cent.

In the forex markets, the rupee ended at 83.14 against the dollar, an increase of nearly 32 paise over the previous finish.

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