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Sensex expected to rise with UPA victory

Sensex expected to rise with UPA victory
PTI
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First Published: Sat, May 16 2009. 04 34 PM IST
Updated: Sat, May 16 2009. 04 34 PM IST
Mumbai: Cheering the people’s verdict for a pro-reform government, market participants on Saturday said that the bourses would welcome the poll results with a rally on Monday of more than 543 points - the number of seats in the Lok Sabha.
Soon after the trends became clear that the Congress-led UPA would form the government again, but without Left support this time, the analysts said that the Sensex could rise by 700-800 points on Monday - the first trading day after the announcement of the results.
“The verdict of the people is clear ... The Left is left out. The UPA has a clearer mandate than they had during the last elections,” Kejriwal Research and Investment Services Head Arun Kejriwal said.
“(The) market would react positively on Monday and could gain 500-700 points. In the coming three days, we will witness a hefty 8-10 per cent rally in the Indian markets,” he said.
The Sensex had surged 300.51 points on Friday to settle at 12,173.42 points. A rally of 500-700 points could take the benchmark index closer to 13,000 on Monday.
Kejriwal exuded confidence that the market would continue to trade on the higher trajectory in the coming week.
Brokerage firm SMC Global vice-president Rajesh Jain also said that the market would open strong on Monday and could rally by up to 400 points in early trade.
(The) Congress has emerged as the biggest single party winner, and all small parties have failed. This ensures (fewer obstacles) in the decision making of the Congress ... Left has been washed out. It is a reflection that people are now preferring to go with the nationalistic point of view, rather than the Leftist ideology,“ Jain noted.
He, however, warned that negative cues from the global markets could put some pressure on the Indian bourses.
“Whatever movements happen on Monday will be mainly driven by the win of the UPA,” he added.
Brokerage house Sharekhan’s research head Gaurav Dua said that it was clear that the “people voted for a stable party and made it clear they do not want to follow Leftist ideologies”.
“Markets will give a thumbs-up on Monday and open firm. A 100-150 point rally on the Nifty can be expected as investor sentiment would be high as a stable government comes to power,” he added.
Unicon Financial CEO G Nagpal said that the market could open with a 2-3% gain on Monday and it was “likely that before noon the Sensex would see a 500 point rally as the the investors would be greatly relieved now that a stable government would come to power”.
“Broadly, people have voted for continuity, development and leadership and ushered in a wave of change as the Left has been wiped out,” he said.
“However, as the day progresses it would look at global cues as all positive news that were to come from the domestic front would be over,” he added.
“If the global markets turn out to be weak, our markets might see some correction post Monday,” Nagpal said.
Although the stock market had gained in its last trading session on Friday, prior to that it was seen under pressure for two consecutive days on concerns about the outcome of the general elections.
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First Published: Sat, May 16 2009. 04 34 PM IST
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