Welcoming the clean sweep by Bharatiya Janata Party in the General Elections, the benchmark Sensex zoomed passed the 25,000 mark on Friday while the broader index Nifty also surged above 7,500 mark. Rupee also strengthened to 11-month high Rs 58.62 per dollar and investor wealth also rose by Rs 1 lakh crore.
The 30-share Sensex, which climbed 1,470 points to hit all-time intra-day high of 25,375.63 in early trade, retreated and ended with a gain of 216.14 points at 24,121.74, a new closing high. Nifty also surged by 440.35 points to a historic high of 7,563.50, succumbed to profit-selling and ended at a peak of 7,203, after gains of 79.85 points.
In terms of market capitalisation, investor wealth rose by Rs 1 lakh crore to end at Rs 80.64 lakh crore. Narendra Modi today stormed to power at the Centre giving BJP its highest-ever tally in the lok Sabha elections, securing for the party a majority on its own and in the process handing out the worst-ever defeat to Congress.
Massive profit-taking pulled both the indices but both manged to close new closing peaks. "We remain bullish on Indian equities. It may be early to book profits," foreign bank UBS said in a report adding that its Nifty target for end-2014 is 8,000.Industry body Confederation of Indian Industry (CII) said that the outcome of the General Elections reaffirms India's vibrant and dynamic democracy and would greatly help to revive growth and investor sentiments. "FDI in multi-brand retail is something that we feel is desirable for India. We will take it up with the government and articulate and share our views," CII President Ajay Shriram said.
Commenting on the overall rating on the country post elections, global rating agency Standard & Poor (S&P) in a note said the reforms initiative and fiscal policies in the next two-three months will have a significant bearing on the country's credit rating. "The challenge for the next government is to regain fiscal prudence in a sustainable way. Implementation of goods and services tax could help stabilise government revenues, while potentially improving the country's growth prospects, by promoting inter-state transactions," S&P added in its note.
The rating agency also assigned the lowest investment grade rating of 'BBB-' to India, which is under watch for a possible downgrade. S&P credit analyst Takahira Ogawa said, "What the next government says and does in the coming months is crucial to boosting confidence in the policy settings and the economy. If confidence rises, investment and consumption in India could strengthen, after being held back by the uncertainty surrounding the election."
On Sensex, off the 30 stocks comprising the index, 18 scrips firmed up while others declined. Major gainers from the Sensex pack were Sesa Sterlite, SBI, Axis Bank, BHEl, ICICI Bank, Tata Power, l&T, Bharti Airtel and Relaince Industries as they rose by 11.11 per cent, 5.93 per cent, 5.6 per cent, 5.25 per cent, 5.15 per cent, 3.72 per cent, 3.52 per cent, 3.33 per cent and 2.59 per cent respectively.
Other gainers included, power, oil&gas and metal indices which gained 3.33 per cent, 2.65 per cent and 2.61 per cent respectively. Information technology index fell the most by 2.22 per cent as rupee appreciated. FMCG, healthcare and technology indices also slid by 1.85 per cent, 1.39 per cent and 1.27 per cent respectively.Reflecting heavy profit-selling in second-line stocks, 1,379 finished with losses while 1,425 shares ended up. Total turnover spurted to Rs 6,808.44 crore from Rs 3,223.00 crore on Thursday.In the forex market, the Indian rupee rallied to a 11-month high of Rs 58.62 per dollar and closed at Rs 58.79 per dollar, logging a 50 paise gain over Thursday's closing on robust capital inflows.Narendra Modi-led BJP's thumping victory today lifted the rupee to an 11-month closing high of 58.79 against the US dollar, adding 50 paise in the third straight day of gains as exporters sold the US currency and whopping Rs 3,643.82 crore of funds from foreign institutional investors flowed into stock market.
Financial markets have been marching upwards in the past few days since exit polls predicted leads for the BJP-led NDA. Gold prices in national capital plunged by Rs 500 to Rs 29,600 per 10 grams today due to low demand from jewellers and retailers amid a weak global trend and strengthening rupee.