Sensex rose 1,421 points to settle at record high of 39,352 (Reuters)
Sensex rose 1,421 points to settle at record high of 39,352 (Reuters)

Sensex posts biggest one-day gain in 10 years, closes at record high: 10 points

  • Banking and auto stocks led the rally
  • The index for banking stocks, Nifty Bank, hit a new high today

Indian markets jumped sharply today, posting their biggest one-day gain in 10 years, after exit polls showed BJP-led NDA getting a comfortable majority in Lok Sabha elections. Most of the exit polls predicted a majority for the Prime Minister Narendra Modi's BJP and its allies after the six-week-long general election ended on Sunday. The rupee also jumped against the US dollar. The Sensex rose 1,421 points to 39,352 while Nifty surged to settle at 3.7% higher at 11,828, their highest close ever. The results of Lok Sabha elections will be announced on Thursday.

Here are 10 updates from Indian markets:

1) Banking and auto stocks led the rally. The Nifty Bank index surged over 4% to hit a new high today while the auto index also rose 4%. PSU banking stocks, in particular, posted sharper gains, with Nifty PSU Bank index rising 8%. Bank of India, Bank of Baroda, Syndicate Bank, Allahabad Bank, SBI and Canara Bank rose 8% to 10%.

2) Among Sensex stocks, both SBI and IndusInd Bank surged 8.5% while Tata Motors, L&T, Yes Bank, HDFC, M&M, Maruti, ONGC, and RIL rose between 5% and 7%.

3) The rupee rose 69.60 in late trade against the US dollar, as compared to its Friday’s close of 70.23. Bonds also rallied on expectations of rate cut from the RBI next month.

4) "Markets today started to price in the end of uncertainty on the debate around political stability and policy continuity on the back of various exit polls. If the actual results are close to exit polls, we may see a revival in domestic and foreign investor sentiment towards Indian equities," said Devang Mehta, head of equity advisory at Centrum Wealth Management.

5) "Once the noise around election results die down, market participants will be keen to watch the steps taken by the government to stimulate demand, boost consumption, revive capex and hence recuperate economic growth. Macros, both global and local and of course more importantly micros (earnings) will be key monitorable going ahead," he added. He remains positive on "high quality financials, beaten down discretionary and non-discretionary consumption related businesses and building materials".

6) Market analyst Sandip Sabharwal says the exit poll results will help Indian markets decouple from global cues in the near term. He remains positive on auto, infra, capital goods and banking stocks, if a stable government is formed.

7) The midcap and smallcap stocks that have underperformed this year could start to outperform, said Sanjiv Bhasin, EVP for markets and corporate affairs at IIFL. He remains positive on PSU stocks.

8) The broader markets also participated in today's rally with BSE midcap and smallcap indices up around 3.5%.

9) Shares of many NBFC today rallied on reports that the RBI may offer them a credit line to help them tide over a liquidity crisis.

10) IndiaBulls Housing Finance and DHFL surged over 10% while other housing finance companies like Gruh Finance, LIC Housing Finance, Repco Home and Reliance Home Finance also posted sharp gains.

20 May 2019, 03:00:54 PM IST

Expectation of RBI rate cut gets strengthened: JM Financial

If the final results on 23 May are similar to the exit poll results, the expectation of rate cut will get strengthened and RBI could also step up on liquidity measures, JM Financial says in a note.

"We continue to like large financials, industrials and select non-financial CPSE names amongst large caps and real estate and chemicals in mid/small caps. We continue to recommend neutral on IT though an underperformance in very near term is likely," the brokerage added.

20 May 2019, 02:28:57 PM IST

Motilal Oswal's top stock ideas

If the predictions of exit polls hold up on 23 May when counting of votes takes place, the BJP and its allies will become the first non-Congress government to return to power with a majority, says Motilal Oswal in a report. Among the largecap stocks, the brokerage likes ICICI Bank, SBI, Maruti, Ultratech, L&T, Titan, Bharti Airtel, Coal India, Infosys and HDFC Life. In the broader markets, it is positive on Federal Bank, LIC Housing Finance, Indian Hotels, Siemens, ABFRL, Crompton Consumer, Ashoka Buildcon, JSPL and Godrej Agrovet.

20 May 2019, 02:21:43 PM IST

Nifty Bank hits new high

Banking stocks were in the limelight today with Nifty Bank index hitting a new high of 30,679 after it surged over 4%. The Nifty PSU Bank index rises 8%, with Bank of Baroda, Bank of India, Allahabad Bank and Canara Bank surging over 9% while SBI and PNB rose 7-8%

20 May 2019, 12:47:25 PM IST

Polls have no long-term bearing on stock markets: Saurabh Mukherjea

Saurabh Mukherjea of Marcellus Investment Managers explains why there is a little co-relation between markets and polls. Given that there is a continuum of policy across different parties, historically, it has mattered not very much who's won and who's lost from a markets perspective, he says. Mukherjea also goes on to explain the growth trajectory for the Indian economy and what it means for stock markets.

20 May 2019, 12:06:02 PM IST

Nifty may retest 11, 850 before 23 May: Rusmik Oza of Kotak Securities

Rusmik Oza, head of fundamental research at Kotak Securities, said: "We expect Nifty 50 to retest the recent high of 11,850 before 23rd May. Break out into a new zone would depend on whether BJP on its own is able to secure more than half the seats."

20 May 2019, 11:41:53 AM IST

What stocks analysts are betting on

Indian markets today gave a thumbs-up to exit poll predictions, with Sensex surging over 950 points. Most exit polls predict a second term for Prime Minister Narendra Modi with ruling BJP and its allies expected to get a comfortable majority. The broader markets also participated in today’s rally with both BSE midcap and smallcap index surging 2%. The actual results of Lok Sabha election will be announced on May 23. “We could see a small rally post May 23 election results if the results are in line with the market’s expectations," says Kotak Institutional Equities in a note. But it cautions that Indian market valuations are not cheap.

“The priority of the next (possibly same) government will be to revive economic growth and investment although the macro-economic set-up is not very favorable," it added.

“The likely continuation of policies and reforms is an added comfort," says Jagannadham Thunuguntla, senior vice president and head of research at Centrum Wealth Management, who expects high-beta sectors like infra to do well. The Nifty infra and banking index today rose over 3%. Read more here.

20 May 2019, 11:12:13 AM IST

Sandip Sabharwal betting on auto, infra, capital goods and cement stocks

Market analyst Sandip Sabharwal says in case NDA gets a comfortable majority, consumption demand may recover soon. “Many consumption stocks are cheap. Auto will be a big beneficiary. Cement is a good story which has been doing well. Real estate could be a dark horse where sentiment may turn around," he says.

20 May 2019, 10:39:51 AM IST

Bajaj Auto defies market sentiment; slips nearly 3% in early trade

Shares of Bajaj Auto defied the broader market sentiment Monday and fell nearly 3 per cent in morning trade on bourses.

Market experts said, though the fourth quarter earnings for the auto major was a good show in a tough environment, the company is expected to face margin pressure.

The shares of Bajaj Auto opened at 3,071, but lost ground and touched 2,953.95, down 2.88 per cent over its previous close of 3,041.80.

Shares of the company were later trading at 2,992.10, down by 49.70, or 1.63 per cent at 1021 hrs.

Bajaj Auto was trading in the negative zone even as the broader market was trading with significant gains. The stock was the biggest loser in the Sensex pack.

"While we believe that margin downgrade cycle (but for any change to product mix) is behind, focus on domestic market share and higher share of Africa in exports are likely to keep margin range bound," Edelweiss Research said in a note.

Edelweiss Research further noted that, a subdued demand environment, costs related to the entry in middle/executive segment (current market share of around 3 per cent) and technological changes due to BSVI will restrict margin to the current level.

Bajaj Auto Friday reported a 19.82 per cent increase in consolidated net profit at 1,408.49 crore for the fourth quarter ended March 31, 2019. (PTI)

20 May 2019, 10:21:43 AM IST

Markets may extend gains but valuations are not cheap: Kotak Institutional Equities

“We could see a small rally post May 23 election results if the results are in line with the market’s expectations," says Kotak Institutional Equities in a note. But it cautions that Indian market valuations are not cheap.

“The priority of the next (possibly same) government will be to revive economic growth and investment although the macro-economic set-up is not very favorable," it added.

20 May 2019, 09:46:45 AM IST

Sameet Chavan of Angel Broking expects midcaps to shine

"The midcap index has not participated in last one and half a year and seems to be in a final stage of its price-wise as well time wise correction. So in case of favourable electoral outcome, we expect midcap stocks to attract traders’ attention," he said.

20 May 2019, 08:43:03 AM IST

Asian markets steady

Asian markets were off to a steady start today despite escalating trade tensions between the United States and China. In early trade, MSCI's broadest index of Asia-Pacific shares outside Japan tacked on 0.6% after a steep 3% loss the previous week. U.S. S&P 500 e-mini futures also turned higher, rising 0.5% following losses on Wall Street on Friday. Japan's Nikkei stock index added 0.4%, after data showed growth in the world's third-biggest economy unexpectedly accelerated in the first quarter.