Sensex Zooms Past 25,000 as Poll Verdict on Expected Lines
Not so often does, things fall in place on expected lines. And YES! for a change things did fall very much on expected lines and in fact, even better.
Talking about the 16th Lok Sabha Elections 2014 outcome, the markets were expecting a change of guard and Narendra Modi-led Bharatiya Janata Party (BJP) victory at the Centre. On hopes of the same, the BSE Sensex had rallied over 6 per cent so far this month, and a whopping 16 per cent in the last four months.
For a change, the election outcome did not dis-appoint the Dalal Street. In fact, things were much rosier than expected. The Street was expected the NDA (National Democratic Alliance) to win around 250-260 seats. Whereas in reality, the NDA government is set to win over 330-odd seats (1500 hrs IST).
The BJP alone was leading in 278 seats, little ahead of the break-even mark at 272. This truly turned out to be a Modi magic – Modi victory.
The markets reacted very positively to the huge margin victory – with the BSE Sensex zooming all the way past the 25,000-mark to a fresh all-time record high of 25,375 – up a solid 1,470 points from the previous close. The banking shares were the lead gainers, with the BSE Bankex up 10.5 per cent at the highest point of the day at 17,986.
Among others, power, realty, oil & gas and capital goods stocks also logged heavy gains, while IT shares slipped into red on the back of spike in the Indian Rupee versus the US dollar.
Generally, markets are averse to a so-called trend – buy on rumour, sell on news. However, this time around the market rally did exceed expectations and the Sensex zoomed past the 25,000-mark.
Needless, to say profit-taking was warranted at higher levels – as the Sensex has then rallied nearly 24 per cent in the last four months at the highest point of the day today.
Going ahead, market experts are now very bullish as the new government with single majority will be in a position to roll our slew of economic measures. Several Indian and foreign brokerage houses have now raised their Sensex year-end target to 26,000-28,000.