Markets log 2nd biggest gain; record high close

Markets log 2nd biggest gain; record high close

Indian markets on Monday vaulted by close 4%, marking their second-best performance ever, on the back of exit polls predicting a clear majority to the Narendra Modi led National Democratic Alliance government.

The heavy buying also led the markets – both NSE Nifty and BSE Sensex – to close at the respective record levels.

The 30-share BSE Sensex opened 770 points up on Monday. During the day’s trade Sensex witnessed heavy buying, and gained over 1,400 points over Friday’s close. The Sensex continued to make further gains and closed at 39,352.67 points, 1,422 points (3.75%) higher.

The last time, BSE Sensex had closed with heavier gains was a decade back on May 18, 2009, when it had gained 2,110.79 points on the back of the incumbent United Progressive Alliance (UPA) returning to the power.

The overall market breadth was also heavily positive, with 2,024 advances, as against 626- declines. Of all the 30 scrips traded on BSE Sensex, on two – Bengaluru-based tech major Infosys and Bajaj Auto ended up the red.

Similarly the broader index 50-share NSE Nifty gained  426 points (3.73%) to close the trade at 11,832.70 points. The index opened 244 points higher in the morning before witnessing the continuous demand of the scrips throughout the day.

However, the Indian rupee seems to have moderated its gained in the morning. It had vaulted in the early morning trade by 75 paise against the US dollar. However, during the day’s trade the gains moderated and the Indian currency was trading at 69.60, up 62 paise against the greenback.

Exit polls for 2019 general elections suggest a clear majority for the Modi-led NDA, with the mean of polls projecting a seat tally of 311, ahead of the 272 majority mark. However exit polls do have a chequered history:  In 2004, exit polls wrongly forecasted BJP-led NDA coalition winning again while in 2009, exit polls meaningfully underestimated Congress-led UPA's seat share. In 2014 while exit polls correctly predicted a BJP-led NDA victory, it underestimated the margin of victory.

“Given that all polls are indicating a majority for the BJP led NDA, market's hopes on this event will go up, ahead of what it was expecting in general. Exit polls in general are projecting a better tally for NDA as compared to opinion polls,” UBS said in a note.