JOIN USUPA win sends Sensex soaring
Boosted by the mandate to the UPA for a new term in office, stocks and foreign exchange markets saw an unprecedented rally on Monday as history was created when trading was halted at the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) for the day on a upper circuit within two hours of the opening bell.
It was also a record that the benchmark index BSE Sensex posted its biggest ever gain of over 2,100 points in just 60 seconds of trading.halted at the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) for the day on a upper circuit within two hours of the opening bell. It was also a record that the benchmark index BSE Sensex posted its biggest ever gain of over 2,100 points in just 60 seconds of trading.
For a change, it was the ‘Hand’ (the Congress’ symbol), as against the normal FII money, responsible for the surge. As investors, enthused by a decisive verdict in favour of the UPA went into frenzied buying, key indices hit 20 per cent upper circuit.
As soon as the opening bell rung at 9:55 am at the BSE and NSE, the markets were locked at 15 per cent upper circuit and the bourses halted trading for two hours. When it re-opened 11:55 am, the BSE Sensex touched a high of 14,273 points, up 17.3 per cent, thereby triggering the final circuit filer for the day. The NSE Nifty was also halted for the day as it touched 4,308, up 636 points. The sharp rise resulted in the total investors’ wealth measured in terms of combined market capitalisation of all the listed companies went up by over Rs 4,08,411 crore to Rs 42,15,354 crore. The SEBI’s existing policy on the index-based market-wide circuit breaker system is applicable at three stages of the index movement at 10, 15 and 20 per cent, irrespective of whether the market moves up or down.
In the past, there have been instances when trading was halted as circuit filters were applied due to a market crash, but it was never applied due to solid surge as on Monday morning. Despite the surge in indices, the gain to investors remained notional as short span of operation in two tranches restricted trading to only 842 stocks at BSE and 207 stocks at NSE. Naturally, trading volumes were low as the total on both bourses for the day was at Rs 3,100 crore, comprising Rs 2,800 crore from the futures and options (F&O) segment and Rs 300 crore from the cash segment.
Stable govt
However, what stood out clearly from this development is the feeling of investors and traders who were relieved that for the first time there will be a government at the Centre which will not be constrained by political pulls and pressures.
Commenting on the stock market performance, Dinesh Thakkar, CMD, Angel Broking said: “The election results have come as a positive surprise and are expected to go down well with the markets as it likes continuity of government policies, mindsets and ideologies.”
Be ready for more fire works at the stock markets on Tuesday.
DH News Service