JOIN USSebi keeping a close tab on markets: Govt
“It was expected that markets will do well and that is what we saw in the morning. Sebi is keeping a watch on the situation we will see how it plays out tomorrow,” Finance Secretary Ashok Chawla told reporters here. Trading at the Bombay Stock Exchange and National Stock Exchange was initially halted for two hours as the stock tracker indices — BSE’s Sensex and NSE’s Nifty — hit the upper circuit within a minute of the opening of the trade.
Nothing unusual
After the markets re-opened at 11.55 am, Nifty surged again hitting the 20 per cent upper circuit leading to suspension of trading at the two bourses for the day. Terming the developments on the BSE and NSE as “nothing unusual”, Chawla said “it is widely believed that the response in the market place is going to be favourable”.
“...that is what the market indicated in the morning. It is not surprising...nothing unusual”, the Finance Secretary added.
On implications of the surge in the stock markets for the economy, currently reeling under the impact of the global financial meltdown, Chawla said, “It is a good sign, but we would of course have to watch that we don’t have too much volatility (on the stock markets)”.
The markets, which opened for the first day after announcement of election results for the 15th Lok Sabha, witnessed frenzied buying with BSE’s 30-share Sensex zooming by 2,100 points to close 17 per cent higher at 14,272.63. Echoing similar sentiments, the NSE’s 50-share Nifty jumped by 20 per cent prompting the authorities to suspend trading for the day at both the exchanges.
Best post-poll rally witnessed
Dalal Street witnessed its best-ever post-election rally in history Monday on the first trading day after announcement of Lok Sabha election results.
In May 2004, election results were announced during trading hours on May 13 and Sensex had ended up 0.8 per cent after highly volatile trade, but lost 6.1 per cent the next day. In 1999, the Sensex had gained 5.7 per cent October 7 as the BJP-led coalition won a majority. In March 1998 the market had gained two per cent after the results, while in 1996 it plunged around five per cent after the poll outcome. Further, in June 1991, the pre- and post-election periods were good for investors and there were no major jitters.