Market chants 'NaMo'; Sensex closes 330 points higher
Markets ended on a high note as investors hailed the victory of the Bharatiya Janata Party in the assembly elections.
Both the Sensexand Niftyhit their all-time high as Bhartiya Janata Party (BJP) emerged triumphant with maximum seat count in three of the four states that went to polls.
The 50-share Nifty index of the National Stock Exchange haopened at 6,415 levels, surpassing its previous high of 6,357 touched on January 8, 2008, after the outcome of the state assembly election polls in four states of Delhi, Rajasthan, Madhya Pradesh and Chattisgarh that saw Bharatiya Janata Party (BJP) emerge at the single largest party in terms of seats bagged.
Nifty crossed the 6,400 mark for the first time ever, surpassing its previous high after a gap of 5 years and 11 months.
It reached an all-time intra-day high of 6415.
Key benchmarks rallied after BJP won the so called semi finals and investors now anticipate a Narendra Modi-led National Democracic Alliance (NDA) government coming to power at the centre in 2014 general elections.
The 30-share Bombay Stock Exchange BSE Sensex closed almost 330 points higher at 21,326 levels after hitting an all-time intra-day high of 21,484 during the day and the 50-share Nifty closed at its all-time high of 6,363.90, up almost 100 points.
“A record high voter turnout, decisive mandates, and a clear preference for growth and governance over entitlements have been the highlights of Indian state elections over the last three years.
The 2013 Assembly elections, touted as semi final ahead of 2014 general elections, reaffirmed each of these trends.
These unmistakable trends will shape the outcome of forthcoming General elections as well, in our view,” said Rajat Rajgarhia, head research, Motilal Oswal Financial Services.
“Going ahead, as the economy sees a gradual pick-up, and a decisive mandate in 2014 Elections create a positive environment, growth rates will rebound significantly from the last 2 years averages. ICICI Bank, PNB, IDFC, Hero Motocorp, Maruti Suzuki, L&T, ACC, ONGC, BPCL, NTPC, Bharti Airtel and Infosysremain our top picks,” he adds.
The rupee was off highs after hitting a four month high in early trades. But dollar flows from foreign investors ensured that the rupee trade stronger compared with previous close.
At 03:47PM the rupee was trading at Rs 61.05 compared with previous close of Rs 61.44 per dollar. During early trades today it had touched a high of Rs 60.90 per dollar.
Banking, capital goods, realty, power and oil & gas indices on the BSE were the top sectoral gainers, rising between 1.8-3.2% higher while Consumer durables index was the only laggard among sectors.
Banking shares continued at their upward march, and BSE Bankex was the top sectoral performer after the rupee opened with a gap up of 56 paise at 60.86 per dollar on Monday against 61.42 on Friday.
ICICI Bank closed at 1200.50, up over 5% contributing the most to the Sensex gains today. Among other financial shares, HDFC Bank, HDFC and SBI were up between 0.7-1.6%.
Among capital goods shares, L&T closed 4.5% higher at Rs 1,146.10 while PSU engineering major BHEL was up 0.2% at Rs 171.70.
In the oil and gas space ONGC and Reliance Ind were up 1-3% each. A report by DNA suggested that RIL may manage to save around 11% in KG-D6 relinquishment after a "positive discussion" with the government
ICICI Bank, Sesa Sterlite, L&T, Maruti Suzuki and ONGC, which rose between 3-5%, were the top Sensex gainers for the day while Jindal Steel, down 6%, Cipla, Tata Steel and Hindustan Unilever were the losers.
Key Asian share indices were trading with gains on the back of better-than-expected economic data from China, weakness in the yen and robust US jobs data wherein 203,000 jobs were created in November. The Nikkei 225 ended 2.29% up while Hong Kong's Hang Seng added 0.29% and China's Shanghai Composite is up 0.05%.
In the broader market, the BSE Mid-cap index was up 0.6% and the Small-cap index was up 0.3%.
Market breadth was marginally negative with 1310 losers and 1201 gainers on the BSE.
On market hitting its all-time high levels, let's take a walk down the memory lane and see what stocks gave stellar returns from 2008, when markets crashed significantly from their all-time high levels)
14 stocks from the top Nifty companies from information technology, pharmaceuticals and automobiles sectors have appreciated more than 100% since January 2008, data shows.
Out of which, eight stocks – Lupin, Sun Pharmaceutical Industries, TCS, Asian Paints, HCL Technologies, IndusInd Bank, Dr Reddy’s Laboratories and Hero MotoCorp have appreciated more than 200% during this period. While ITC, Tata Motors, Hindustan Unilever, Mahindra and Mahindra, HDFC Bank and Infosys have gained between 100 – 180%.
The biggest gainer – Lupin – saw its market value appreciate jump sevenfold to Rs 858 from Rs 122 on January 8, 2008. Sun Pharmaceutical Industries, the second largest gainer, has surged 428% to Rs 586, followed by TCS which now stands at Rs 2,015, up 308% and Asian Paints which surged 305% to Rs 506 on the NSE.
However, infrastructure, capital goods, metal, oil and gas, power and banking shares are among major underperformers – falling nearly 90% during the period.
Larsen and Toubro (L&T) which rallied nearly 25% in less than a month at Rs 1,139, is still trading 21% lower from its January 2008 market price of Rs 1,446.
DLF (down 86%), Jaiparakash Associates (82%), BHEL (65%) and Tata Steel (52%) are currently available at over 50% below their price levels in 2008. Reliance Industries, Hindalcao, Tata Power
Company, Jindal Steel and Power and Bharti Airtel are trading lower by 30 – 50%.
Among other shares that made headlines today, VST Tillers Tractors ended 3% higher at Rs 680, extending its over 10% rally in past three trading sessions, after HDFC Mutual Fund acquired about 150,000 shares through open market.
Crompton Greaves has moved higher by 4% at Rs 134 after the company said that its promoters have released nearly seven million pledge shares lying with lenders.
McNally Bharat Engineering (MBEL) today said it has received an order worth Rs 209.84 crore from a thermal power producer for operation and maintenance of coal handling plant.
Image: A trader speaks on phones while trading at a stock brokerage in Mumbai.
Photographs: Arko Datta/Reuters