The BSE Sensex surged over 550 points, while the broader Nifty broke above the key 7,000 levels for the first time as markets rallied to record highs for a second successive session on Monday. The rupee, too, strengthened to as much as 59.51 per dollar, its strongest level since July 29, 2013 from its close of 60.02/03 on Friday.
The Sensex has now jumped over 1,200 points or around 5 per cent in just two sessions. Strong buying in equities came amid rising hopes that exit polls would show Bharatiya Janata Party (BJP) and its allies winning a majority in the current elections. Exit poll results are due to be telecast at 6.30 p.m. after the five-week-long elections wind up today. Actual results will be announced on May 16.
"Markets are factoring numbers close to 230-240 seats for the BJP alone, and if that is the case, the NDA will get a majority on its own. That will lead to pro-growth, right of central, stable formation, which is enthusing for the investors," said Manishi Raychaudhri, strategist and head of research at BNP Paribas Securities.
The Nifty has surged 17 per cent since Narendra Modi was announced as the BJP's prime ministerial candidate on September 13. Polls have consistently shown the BJP ahead, raising expectations the opposition party, which is seen by markets as being more investor- and business-friendly, will either win or come close to an outright majority.
Domestic-oriented shares led the rally, with the Bank Nifty hitting a record high.Coal India, up 7.3 per cent, was the top Nifty gainer. HDFC Bank and Tata Motors closed with over 4 per cent gains, while ITC, Hero MotorCorp, Maruti Suzuki, SBI and Reliance Industries ended 3-4 per cent higher.
Infrastructure shares also gained, with Power Grid rising 4.35 per cent and Grasim Industries ending 4.3 per cent higher. State-run power equipment maker Bharat Heavy Electricals surged 2.4 per cent.
"Infrastructure, engineering, cement, power and industrial stocks should gain if a Modi-led government comes to power," said UR Bhat, managing director, Dalton Capital Advisors.
Despite gains, analysts cautioned investors about going overboard amid the euphoric sentiments on the Street. That's because not only opinion polls, but exit polls, too, have got it horribly wrong in the past.
The BSE Sensex ended 556.77 points higher at 23,551, while the Nifty closed up 155.45 points at 7,014.25.
Source: NDTV Profit
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