Poll Vault: D-Street bulls cheer BJP feat in states
Sensex closing above 68,000 for the first time, as the Bharatiya Janata Party's strong showing in state elections pumped up an already buoyant market. The Sensex and Nifty jumped over 2% each — the highest single-day gain in 14 months — boosted by resurgent foreign fund flows, receding US bond yields and softening crude prices.
The Nifty gained 2.07%, or 418.90 points, to close at 20,686.80 after hitting a high of 20,702.65.
The Sensex rose 2.05%, or 1,383.93 points, to close at 68,865.12, with the 70,000 mark in clear sight if the trend persists. Total market capitalisation shot up by ₹7.56 lakh crore (around $91 billion) on Monday.
Analysts said the market looks overbought after the 10% runup since October 26 but a big reversal in the bullish trend is unlikely.
The Volatility Index spiked 4.9% to 12.99, suggesting traders see higher risks to the market in the near term after the recent surge.
Investors see the BJP’s convincing wins in Madhya Pradesh, Rajasthan and Chhattisgarh reflecting broader national sentiment ahead of general elections in less than six months.
Analysts expect the Sensex and Nifty to gain about 4-6% ahead of the national polls and are recommending investors to stay put.
“Since political stability is one of the important parameters, especially for FPIs (foreign portfolio investors), any incremental clarity on continuity is taken positively,” said Shreyash Devalkar, head of equity, Axis Mutual Fund.
“The expectation of interest rates peaking is also a factor to be considered in the rally next year.”
FPIs net bought shares worth 2,073 crore on Monday while their domestic counterparts pumped 4,797 crore into the market. These purchases also included some large deals.
The buying on Monday took
