Mumbai: The bulls are expected to continue to remain in control over Dalal Street tomorrow with the exit polls showing a clean sweep for the BJP-led National Democratic Alliance (NDA). On Monday the Sensex and Nifty hit their second consecutive all time high amidst growing expectation that the BJP-led led NDA would be able to form a stable government at the Centre. Mr Ambareesh Baliga, managing partner, Edelweiss Global Wealth said the Nifty could move 150 points up on Tuesday. but on the flip side “the markets have already priced in the best possible scenario.” The next three days could be good but by Thursday on the eve of the election results on May 16, markets could get jittery, he said.
“It’s not a time for those who are not already in the market to buy. They could wait for a correction,” he said. The ground reality is very different from the euphoria being displayed by the markets and it is reflected in the negative IIP numbers with manufacturing and investment just not picking up, he said. Additionally if the election results on Friday are not as positive as the exit polls predicted, markets could see a reversal. After opening the day on Monday in an upbeat mood, the Sensex surged to a life time high of 23,572.88 levels before ending the trading session at 23,551, gaining 556.77 points or 2.42 per cent.
The Nifty scaled above its psychological 7,000 level mark for the first time to end the day at 7,014.25, gaining 155.45 points or 2.27 per cent. “If the actual results come in line with exit poll results, the Nifty could see another 200-300 point rally. However, if the actual results don’t come in line with exit poll projections, it would be chaos. The markets could hit at least two consecutive lower circuit limits,” said Shashank Mehta, an independent equity derivative analyst.
The forex markets also remained in a jubilant mood with the rupee hitting a 10 month high of 59.51 against the US dollar. “The rally in Indian equities has not been broad-based and has instead been focused in select sectors and companies. The current recovery in the Indian economy will be more protracted but bodes well for long-term investors focused on the quality of future growth in India.” said Pankaj Murarka, head of equity, Axis Asset Management Company.
The provisional data from the stock exchanges showed that foreign institutional investors (FII) bought shares worth Rs 1,217.95 crore. Domestic-oriented shares led the rally, with the NSE bank sub-index hitting a record high. State Bank of India Ltd gained 3.2 per cent, while Larsen & Toubro Ltd rose 3.3 percent. Infrastru-cture shares also gained, with Ambuja Cements up 2.1 per cent, while state-run power equipment maker Bharat Heavy Electricals Ltd surged 2.4 per cent. RIL gained 3.1 per cent after the firm and its partners in a gas block said on Saturday they were taking the government to arbitration seeking implementation of higher gas prices.
