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Business News/ Market / Stock-market-news/  Nifty scales 9000, Sensex rises 496 points on BJP’s victory in UP elections
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Nifty scales 9000, Sensex rises 496 points on BJP’s victory in UP elections

The Nifty gained 1.71% to hit its record high of 9,087 points while Sensex closed at 29,442.63, the highest since 5 March 2015, fuelled by the BJP victory in the UP elections

BSE Sensex closed higher by 496 points, or 1.71%, to 29,443. Photo: MintPremium
BSE Sensex closed higher by 496 points, or 1.71%, to 29,443. Photo: Mint

Mumbai: National Stock Exchange’s Nifty index closed at a record high while BSE’s Sensex closed at a two-year high on Tuesday as investors cheered the Bharatiya Janata Party’s landslide victory in Uttar Pradesh.

The Sensex rose 496.40 points, or 1.71%, to 29,442.63, the highest since 5 March 2015 while Nifty 50 index gained 1.71% to 9,087 points.

The India Vix volatility index hit a 27-month low at 12.40, the lowest level since 10 December 2014.

In intraday trading, Sensex gained as much as 2.13% to 29,561.93, a level last seen on 4 March 2015. Nifty 50 index surged as much as 2.11% to hit an all-time high of 9,122.75.

On Saturday, the BJP won 312 out of 403 seats in the assembly elections of India’s largest state, raising expectations of political stability, smooth implementation of a proposed goods and services tax and reforms in areas such as labour laws and land acquisition.

“The recent state elections win may intensify the government’s economic reform efforts, accelerate economic progress of the large state of UP and strengthen the government’s resolve to address key pending issues (NPLs, power). Nonetheless, earnings will be the key to the market’s performance as global and domestic interest rate cycles will likely turn less supportive" said Kotak Institutional Equities in a report to its investors.

Experts say that the remaining two years of the current government at the centre will see bolder initiatives than even the politically risky demonetisation move. BJP leaders say that the focus will now be on compliance and improving the ease of doing business. Also, a far more aggressive campaign against illegal wealth is expected, with a focus on implementation of the new benami law in property transactions.

Also Read| Rupee strengthens past 66-mark to close at 16-month high against US dollar

The landslide win “will help BJP consolidate their position in Rajya Sabha as well. Domestic Mutual Fund and Insurance companies have seen large and continuous inflows and as a result, have created large cash pools in the portfolios. They will have to deploy that money aggressively, that will keep the momentum of the market high and will look forward to the FY17 last quarter earnings", said Motilal Oswal, chairman and managing director of Motilal Oswal Financial Services Ltd. “We think this momentum is here to stay and think from long-term perspective we are on the cusp of the positive inflexion point of earnings."

Traders are now cautious ahead of consumer price inflation data for February due after 5.30pm on Tuesday. According to Bloomberg analyst polls, CPI will accelerate to 3.6% for February versus 3.17% a month ago.

Traders were also cautious ahead of the expected increase in US interest rates during a two-day meeting which will start on Tuesday and end on Wednesday, and were looking for clues on how quickly the US central bank is planning to tighten monetary policy.

Among members of the Sensex, ICICI Bank Ltd was the top gainer, up 5.8%, while Hindustan Unilever Ltd and Larsen & Toubro Ltd surged 4.5% each. Among losers, Bharti Airtel Ltd declined 1% followed by Axis Bank Ltd and Coal India which fell 0.8% and 0.6%, respectively.

Among sectoral indices, BSE Capital goods index was the top gainer with a gain of 2.8% followed by BSE Consumer durables and Finance which gained 2.6% and 2.1%, respectively. BSE Bankex and Industries gained 1.8% and 1.7%, respectively. BSE Telecom index was the top loser, declining 0.6% followed by BSE Metal index which fell 0.4%.

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Published: 14 Mar 2017, 09:48 AM IST
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