Jubilation continued on Dalal Street with both the frontline indices snapping the session above their psychological 24,300 (Sensex) and 7,250 (Nifty) levels, ending at fresh all time closing high levels after BJP won clear majority in the country’s general elections. Boisterous benchmarks once again showcased an enthusiastic performance with investors getting support from report that FII’s made substantial purchases in Indian stocks on May 16, 2014. Though, markets after a gap-up opening pared all of their gains and entered into negative terrain for a brief period as profit booking was witnessed at higher levels. But, volatility ruled the roost as the key benchmark indices regained positive zone and thereafter not even an iota of profit booking was witnessed in the session, as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks.

Overall, sentiment remained upbeat, while some support also came after Industry body CII expressed hopes that the economic reforms agenda can be taken forward with a stable political dispensation and with a prudent macroeconomic management, the economy could recover to 6.5 per cent GDP growth rate in 2014-15 as against an estimated 4.9 per cent in 2013-14. On the currency front, the rupee was also mirroring the feel-good sentiment prevalent on Dalal Street. The currency touched a fresh 11-month high today; it was trading at 58.58 a dollar – the highest level since June 18, 2013 – up 20 paise compared to Friday’s closing value of 58.79 a dollar.

However, global cues remained sluggish with European markets trading lower in early deals, as investors were cautious amid sustained expectations for further easing measures by the European Central Bank (ECB). Asian markets shut shop mostly in the red, undermined by the concerns about slower growth in China, which led to mainland Chinese shares falling more than 1 percent to two-month lows on news that Beijing is tightening its grip on interbank lending to defuse risks in the shadow banking system.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Stocks related to railway such as Texmaco Rail and Engineering, Kalindee Rail Nirman, Titagarh Wagons, Kernex Microsystems and Hind Rectifiers remained on buyers’ radar on hopes that Bhartiya Janta Party’s Prime Minister designate, Narendra Modi will stand by his promise to improve the Indian Railways. Additionally, infra, realty and public sector undertakings (PSUs) counters too extended their past week’s rally. On the flip side, defensive sectors such as fast moving consumer goods (FMCG), information technology (IT) and pharmaceuticals lost sheen as investors shift their focus to infrastructure-related sectors.

The NSE’s 50-share broadly followed index Nifty surged by over sixty points to end comfortably above its psychological 7,250 support level, while Bombay Stock Exchange’s Sensitive Index — Sensex surged over two hundred and forty points to surpass the psychological 24,350 mark. The broader markets outperformed benchmarks and traded jubilantly throughout the session, ending the trade by over four percentage points. The market breadth remained in favour of advances, as there were 2154 shares on the gaining side against 698 shares on the losing side while 96 shares remain unchanged.

Finally, the BSE Sensex surged by 241.31 points or 1.00%, to 24363.05, while the CNX Nifty gained 60.55 points or 0.84%, to 7,263.55.

The BSE Sensex touched a high and a low of 24448.47 and 24107.99, respectively. The BSE Mid cap index was up by 4.19%, while the Small cap index rose by 5.82%.

The top gainers on the Sensex were BHEL up by 16.94%, Coal India up by 12.73%, NTPC up by 10.35%, ONGC up by 8.17% and Tata Power up by 7.95%. While TCS down by 5.69 %, ITC down by 5.45%, Dr Reddys Lab down by 5.22%, Infosys down by 4.88% and Sun Pharma down by 4.83% were the top losers in the index.

On the BSE Sectoral front, Power up by 10.15%, PSU up by 9.00%, Capital Goods up by 8.34%, Realty up by 6.91% and Metal up by 6.81% were the top gainers, while IT down by 4.95%, FMCG down by 4.00%, Healthcare down by 3.66% and Teck down by 3.46% were the only losers in the space.

Meanwhile, in a positive development for the economy, Global Rating agency, Moody’s Investors Service underscored that the landslide victory by the Bharatiya Janata Party (BJP) in elections is ‘credit positive’ for country’s sovereign profile and corporate sector. It further added that this strong mandate increases the possibility of a stable central government pursuing a shared economic agenda for addressing country’s macroeconomic challenges since intra-coalition differences around economic priorities in the past had derailed measures to improve India’s operating environment.

However, the rating agency sounded a word of caution on expecting any immediate change in economic situation as it highlighted that though the policy measures to revive the economy would emerge in the coming months, but growth, fiscal and inflation metrics were unlikely to improve any time soon. The agency said although market indicators have shifted rapidly in response to sentiment, economic trends will reverse more slowly, given that economic data still shows that growth remains weak and inflation high.

Additionally, it pointed that though India’s GDP growth rate was higher than that of several peer countries, even during its economic slowdown, its fiscal metrics, inflation levels and infrastructure for long had remained weaker than those of other ‘Baa’-rated countries. Also, the rating agency averred that the extent to which these metrics improve would depend upon the measures which the government adopts to address country’s weak fiscal position, the regulatory conditions on investment and output and the lack of adequate social and physical infrastructure.

However, it did acknowledge the incremental portfolio capital flows into India this year on hopes of a BJP-led coalition forming the next government and pursuing policies conducive to investment and economic growth, which in turn led to rupee appreciating by 5% against the US dollar since the beginning of the year.

The CNX Nifty touched a high and low of 7,291.10 and 7,193.55 respectively.

The top gainers of the Nifty were BHEL up by 14.42%, Coal India up by 13.20%, NTPC up by 12.16%, PNB up by 11.23% and ONGC up by 8.11%. On the other hand, TCS down by 6.24%, Dr. Reddy’s Laboratories down by 5.48%, Infosys down by 5.27%, Hindustan Unilever down by 4.95% and ITC down by 4.75% were the top losers.

The European markets were trading in red, France’s CAC 40 was down by 0.39%, Germany’s DAX was down by 0.39% and United Kingdom’s FTSE 100 was down by 0.44%.

The Asian markets concluded Monday’s trade mostly in red, as investors await the release of key manufacturing data from China later in the week. China’s top economic planning agency stated that the country will try to quicken the pace of economic reform this year as part of the government’s efforts to arrest a slowdown in the world’s second-largest economy. The National Development and Reform Commission reaffirmed nine reform priorities for 2014, including deepening reforms in the power and the oil and gas industries and cutting red tape for investment approvals. Japan’s Core Machinery Orders rose to 19.1%, from -8.8% in the preceding month. Hong Kong Unemployment Rate remained unchanged at a seasonally adjusted 3.1%, as of the preceding month. Malaysian GDP rose to a seasonally adjusted 6.2%, from 5.1% in the preceding month. Thailand’s gross domestic product fell less-than-expected last month. Thai GDP fell to a seasonally adjusted -0.6%, from 0.6% in the preceding month.

Asian Indices

Last Trade

Change in Points

Change in %

Shanghai Composite

2005.18

-21.32

-1.05

Hang Seng

22704.50

-8.41

-0.04

Jakarta Composite

5015.00

-16.58

-0.33

KLSE Composite

1887.07

3.73

0.20

Nikkei 225

14006.44

-90.15

-0.64

Straits Times

 3262.43

-0.16

KOSPI Composite

2015.14

1.70

0.08

Taiwan Weighted

8899.90

11.45

0.13