Buoyed by BJP's Uttar Pradesh win, Nifty hits a record high

PM Narendra Modi delivers a victory speech at the BJP headquarters in Delhi yesterday, a day after the party scored a landslide victory in UP

The Bharatiya Janata Party's landslide victory in Uttar Pradesh and Uttarakhand worked wonders for the market as the Nifty hit an all-time high of 9,123 and the Sensex soared 616 points in opening trade today after a gush of capital inflows.

What made the mood more buoyant were the better-than-expected industrial output numbers. IIP (index of industrial production) in January bounced back by expanding 2.7 per cent year-on-year.

The 50-share NSE Nifty climbed 188.20 points, or 2.10 per cent, to record an all-time high of 9,122.75 intra-day, surpassing its previous corresponding figure of 9,119.20 on March 4, 2015. The 30-share Sensex, too, zoomed 615.70 points, or 2.12 per cent, to trade at 29,561.93, a level last seen on March 4, 2015. The gauge had gained 44.29 points in the past two sessions.
Markets were shut yesterday on account of Holi.

Traders had a field day as both the Nifty and the Sensex soared. File pic

Sentiment turned extremely bullish as the BJP's huge victory in UP and Uttarakhand is seen as giving a fillip to the government's reform agenda, which triggered a flurry of buying by participants, including foreign and domestic institutional investors.

Stock market experts said all major sectoral indices were trading in the green, especially gas distribution stocks (with the government's push for LPG connections), banking stocks like HDFC, ICICI Bank and Yes Bank (possibly owing to the promise of waiver of farm loans) and infrastructure and cement (boost to infrastructure was promised in the BJP's manifesto for UP). ICICI Bank, HDFC, Yes Bank were three of the top five gainers on Nifty, rising 5 per cent, 3.17 per cent and 2.77 per cent, respectively. Grasim Industries and Larsen & Toubro were up 3.1 per cent and 2.8, respectively.

"The BJP promised loan waiver, free laptops, 24x7 electricity, medical colleges and super-specialty hospitals and six IT parks, amongst others. So, the stocks were bound to go up after the party's victory. UP will be ruled by a national party after 15 years," said a report by Motilal Oswal, leading online share trading company.

The report said the markets expected a BJP victory, but that 'the magnitude of the victory' was a surprise.

Ajay Kejriwal, president of stock brokerage firm Choice Broking, said the markets had reacted positively to stability and the policies of PM Narendra Modi. "Investors want a stable government and with a majority everywhere, the PM can take bold steps."

With inputs from agencies