UP poll results send Nifty to record high
Investors’ wealth up by `1.55L cr; Sensex near all-time high; Rupee up 78p POSITIVE SENTIMENTS RULE
Mumbai: The BJP’s resounding victory in Uttar Pradesh propelled the Nifty to record highs, with the benchmark closing above the 9,000 mark for the first time. The 50-share NSE index hit 9,122.75, an all-time intra-day high, before ending at 9,087 with a solid 152.45 points gain. Sentiment soared on hopes that the Narendra Modi government would now focus on key reform measures.
Investor’s wealth increased by `1.55 lakh crore on Tuesday amidst broad-based buying in domestic equities as a landslide victory enjoyed by the Bharatiya Janata Party in the recent state assembly polls renewed hopes about bolder reforms and stable policy environment going ahead.
The broader 50-share Nifty zoomed past all its key psychological resistance levels to hit a record high of 9,122 in the intra-day trade before ending the day at 9,087, its highest closing level, gaining 152.45 points or 1.71 per cent.
The 30-share Sensex vaulted 496.40 points or 1.71 per cent to close the session at 29,442.63, just 600 points shy of its alltime high of 30,025.
However, the total market capitalisation of BSE-listed firms hit an all-time high of `118.87 lakh crore.
The positive momentum was also reflected in the foreign exchange market with the Rupee rallying to an 18-month high against the US dollar.
The partially convertible rupee appreciated 78 paise against the US dollar to end the session at 65.82 as against its previous sessions close of 66.60 per dollar.
While the equity valuations have become expensive, experts said the underlying sentiments remain bullish and investors would consider every dip in the market as a good opportunity to build long-term portfolio.
“There are no major negative factors that could drag down the markets significantly. The major event that the global markets are looking forward to is the decision of the US Federal Reserve on interest rate hike. While the markets have already priced in a possible rate hike by the US Fed, the quantum of hike and guidance would influence the markets in the near term. Since the underlying sentiments in the domestic markets are positive, any correction in the markets would be bought into,” said Siddharth Purohit, senior research analyst at Angel Broking.
“There are a lot of stocks which are trading at fair valuations and they could see a significant rally in coming days. The BJP victory in UP would lead to more focus on the infrastructure sector stocks as that is one area where the new government in UP is expected to implement a lot of development work,” said Deven Choksey, MD, K.R. Choksey Securities.
According to him, the Nifty is enjoying strong support at 8,700 levels and it could possibly rally to a record high of 9,900 level mark in the next one year.
India’s volatility index (VIX), which measures investors expectation about the near-term volatility in the markets dropped 11.16 per cent on the National Stock Exchange (NSE). The BSE Bankex, Capital Goods and Consumer Durable index hit their respective 52-week high on Tuesday.