Stock markets get NaMo boost

Stock markets get NaMo boost
Highlights

With exit polls predicting a comfortable second- term for the Narendra Modi government at the Centre, stock markets were on a fire on Monday, logging in record levels of upswing.

With exit polls predicting a comfortable second- term for the Narendra Modi government at the Centre, stock markets were on a fire on Monday, logging in record levels of upswing.

Benchmark BSE Sensex vaulted 1,442 points, or by 3.75 per cent, to close at 39,352.67 points.

It was the biggest single-day gain for the country's key stock market index in over six years. NSE Nifty zoomed 421 points to settle at 11,828.25 points. For Nifty, it was the biggest single-day upswing as well, in a decade or so.

Thanks to the record rise of stock markets, investor wealth soared by a whopping Rs 5.33 lakh crore in one day.

The total market capitalisation of BSE-listed companies reached 1,51,86,312.05 crore at the end of trading session on Monday as compared with Rs 1,46,58,709.68 crore recorded on Friday last week.

Investors were so euphoric that as many as 66 stocks hit 52-week high on Monday. The stocks included Bajaj Finance, HDFC Bank, ICICI Bank, Titan and Kotak Mahindra Bank.

Interestingly, all Sensex stocks barring Bajaj Auto and IT major Infosys, ended in green. That reveals the extent of bullishness in stock markets.

The positive impact of exit polls extended to Indian currency as well. The rupee appreciated by 49 paise - the highest single day gain in two months – to end at 69.74 against US dollar.

But why did markets turn so euphoric on the possibility of Narendra Modi-led BJP and its coalition NDA (National Democratic Alliance) coming back to power?

As several market analysts pointed out, investors are of the view that several reform measures initiated by the Modi government will continue if it retains power.

Markets continued their losing streak in the past one month or so following reports that the seven-phase 2019 General Elections which concluded on Sunday would throw up fractured mandate.

As Opposition had failed to project a worthy rival who could effectively take on Prime Minister Narendra Modi, investors feared that a fractured mandate would lead to political instability in the country, hampering economic growth.

That's the reason why bears have taken control of the markets in last few weeks.

With majority of exit polls forecasting that BJP-led NDA would win over 300 seats with handsome gains in West Bengal, the home turf of mercurial TMC leader Mamata Banerjee, and Odisha, investors turned bullish, thereby pushing indices up.

Of course, stock markets retracted from their record highs and Sensex ended 383 points lower on Tuesday. Nifty also went down by 119 points.

The decline was primarily due to profit-booking by investors and traders. Nevertheless, the buoyant trend in stock markets will continue till Thursday when votes will be counted, and results will be out.

If the exit polls come true and the Modi government gets second-term with landslide margin as projected, stock markets are likely to get further boost.

Another stratospheric rise as witnessed on Monday, could not be ruled out. If the exit polls go wrong and elections throw up a fractured mandate, markets are likely to bleed and there will be market mayhem for a few days.

That way, the counting day (Thursday) is as crucial for markets as for politicians.

Show Full Article
Download The Hans India Android App or iOS App for the Latest update on your phone.
More Stories


Top