New Delhi: Ever since the decisive mandate for the BJP in the recently announced general elections, Sensex has been riding the Narendra Modi wave inexorably. Investors' wealth has gone up by 3.86 lakh crore in two days of market rise where the Sensex has gained 872 points, PTI reported on Monday. The Sensex on Monday closed 248.57 points higher at 39,683.29.

Led by the rally in the equity market, the market capitalisation (m-cap) of BSE-listed companies rose by 3.86 trillion to 15.4 trillion on the BSE.

At the close of trade on Thursday, the market valuation of BSE-listed firms was 15.02 trillion.

The Sensex had hit its all-time high of 40,124.96 during the trade on May 23.

Here are five possible reasons why Sensex has been on the rise lately.

1) Thumping majority for Modi: The current government wining the general elections by a two-thirds of majority will calm the political environment in the country, say market analysts. "NDA coming back to power with a thumping majority is a clear sign of people’s belief in PM Modi’s administration. We believe that the government will continue to tread the path of calibrated reforms, fiscal consolidation, infrastructure creation and rural growth. With political and policy uncertainty abating significantly, we believe the market volatility (VIX) will decline. Apart from decline in market volatility, another round of rate cut by RBI is likely. All these factors point towards a higher a market multiple, which is likely to sustain. Considering a higher market multiple of 20x (earlier 18x) on FY20E earnings, we upgrade our December Nifty target to 13,000," said Reliance Securities.

2) Large cap stocks' solid show: From the 30-share pack, 17 scrips gained led by Tata Steel, YES Bank, NTPC, Larsen and Toubro, Axis Bank and State Bank of India.

Among sectoral indices, the BSE capital goods, power, industrials, utilities, metal and realty indices rallied up to 3.06%. "The markets continue their upward trend supported by FII (foreign institutional investor) buying in the past two consecutive trading days," said Hemang Jani, Head (Advisory), Sharekhan.

3) Decoupled from global trends: Thanks to the thumping win for the NDA dispensation, the market has not been factoring in global trends like slowdown in global growth, US-China trade war and rise in oil prices. “Post the election week, our markets opened slightly higher despite SGX Nifty indicating a sluggish start. Our markets decoupled from the global peers last Monday; but it was evident also considering the major event on the domestic front. But it seems that the rub off effect is still there and today too, we did not even try to peep what other global markets are doing. We had a trended move throughout the day with less momentum to add another seven tenths of a percent to the bulls’ kitty," said Sameet Chavan, Chief Analyst, Technical and Derivatives, Angel Broking.

4) Midcaps on the rise too: In the broader market, the S&P BSE Midcap index gained 1.13% and BSE Smallcap 1.77%. "As a trader, one needs to focus more on individual stocks from the broader market as we expect lethargic moves from previous index drivers (mentioned in the earlier report as well). The way overall ‘Midcap’ index is shaped up, we do not expect this optimism to halt anytime soon as they seem to have come out of their slumber after a long time," said Chavan. "Nifty extended its prevailing upward bias and ended with decent gains. After flat start, it gradually inched higher, thanks to buying interest in banking, realty and metal majors. The broader indices too participated in the move and gained over a percent each," said Jayant Manglik, President, Retail Distribution, Religare Broking. On the BSE, 1,793 scrips advanced, while 785 declined and 188 remained unchanged.

5) Axis, ICICI Bank hit life-time highs: Shares of Axis Bank and ICICI Bank hit lifetime highs of 814.70 and 437.90, respectively. On Monday, Axis Bank shares finished 2.37% higher at 812.45 while those of ICICI Bank ended at 435.20 by rising 0.86%. In Calendar 2019, Axis Bank has surged 31% while ICICI Bank has gained 21%.

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