Investor sentiment in the past few days has been buoyant with participants hoping that a stable and business-friendly government will put growth back on track and kick-start reforms, which will give a fillip to earnings of listed firms.
The NSE Nifty also jumped 60.55 points, or 0.84 per cent, to end a new closing high of 7,263.55 -- surpassing Friday's close of 7,203.00. The Sensex's previous closing peak was 24,121.74.
The rising rupee, which surged to 58.37 against the US dollar intra-day, threatened to spoilsport as shares of IT and pharma companies -- mostly exporters -- were beaten down.
Brokers said buying activity gathered momentum on robust foreign funds inflow on optimism that the new government at the Centre would shortly take steps to revive economic growth.
"Markets continued to move upwards today in light of NDA's resounding victory in Lok Sabha polls. However, Export oriented stocks like Pharma and IT were hit hard on weak rupee," said K K Kavikondala, CEO, WealthRays Securities.
The landslide victory of BJP-led NDA in polls is credit positive for India as a stable central government is expected to address economic challenges, a Moody's report today. Besides, reports said a clutch of foreign brokerages like Nomura and Goldman Sachs have upgraded Sensex/Nifty targets.
Stocks of power companies, led by 10.35 per cent surge in NTPC, were the star performers of the day. Bhel zoomed 16.94 per cent on signing a pact with Indonesian firm to set up a power plant. Coal India sprinted nearly 13 per cent.
BSE Power index gained a whopping 10.15 per cent. JP Power, NHPC, Adani Power, BHEL, GMR, Power Grid Corp., Torrent Power and Siemens ended up to 30 per cent higher.
The sectoral barometer was followed by 8.34 per cent rise in BSE Capital Goods, 6.91 per cent jump in BSE Realty and 6.81 per cent spike in BSE Metal.
However, broader benchmark gains were capped as IT exporters led by Infosys, TCS and Wipro lost sizeable grounds as the rupee strengthened against the American currency, dragging the IT sector indices down by 4.95 per cent.
BSE Sensex, Nifty rise to fresh closing peak; Bhel zooms 17 pct
(Reuters) - Indian shares hit a record closing high on Monday as investors continued to switch to stocks with a domestic focus, such as NTPC, on hopes the new government to be led by Narendra Modi would spur major economic reforms.
However, broader gains were capped as exporters lost heavily after the rupee strengthened to an eleven-month high against the dollar, sending IT outsources and drug makers sharply lower.
The victory of the Bharatiya Janata Party and its prime minister candidate, Narendra Modi, has spurred optimism the new government would kickstart an economy growing at its slowest in a decade and led a slew of banks including Goldman Sachs and Citigroup to sharply raise their forecasts for the BSE and NSE indexes.
Foreign investors have remained strong buyers in the rally. On Friday, the day of the election results, they bought shares worth a net 36.34 billion rupees ($615.6 million), their biggest single-day purchase since March 21, provisional exchange data showed.
"A stable and decisive government can re-engineer the Indian growth story by spear-heading structural reforms going ahead, and thus increasing foreign investors' interest in India," said Nirakar Pradhan, chief investment officer at Future Generali India Life Insurance.
The benchmark BSE index rose 1 percent, or 241.31 points, to end at 24,363.05, a record closing high but still well below the all-time high of 25,375.63 hit on Friday.
The broader NSE index rose 0.84 percent, or 60.55 points, to end at 7,263.55, also a record closing high, after hitting an all-time high of 7,563.50 in the previous session.
Domestic-focused shares continued to lead the rally. NTPC surged 10.6 percent, while Oil and Natural Gas Corp ended 8.5 percent higher.
Tata Power Co Ltd rose 7.5 percent while Larsen & Toubro Ltd gained 6.8 percent.
The NSE sub-index for lenders rose 2.5 percent to a record closing high. Punjab National Bank surged 10.5 percent while State Bank of India jumped 6.2 percent.
Also, NSE midcap index ended 4.4 percent higher after earlier rising to a record high, helped by a 16.8 percent surge in Reliance Infrastructure and a 14.3 percent jump in Power Finance Corp.
However, exporters, who had led a rally late last year and early this year, slumped after the rupee hit its strongest in eleven months against the dollar.
Tata Consultancy Services slumped 5.7 percent, and HCL Technologies lost 4.2 percent, Infosys ended down 5.1 percent, while Wipro fell 4.1 percent.
IT stocks also slumped amid heavy selling by domestic mutual funds, three institutional dealers told Reuters, although they said the state-run Life Insurance Corp (LIC) had stepped in to buy to prevent even bigger falls. LIC did not respond to email or phone queries.
Dr.Reddy's Laboratories fell 5 percent while Lupin lost 4.6 percent.
Domestic funds sell Indian IT shares, but LIC buying - dealers
Indian IT stocks slump amid heavy selling by domestic mutual funds, three institutional dealers tell Reuters, although they say state-run Life Insurance Corp (LIC) has been stepping in to buy to prevent even bigger falls.
"It's the domestic mutual funds which are churning out of IT. LIC is still a net buyer," an institutional dealer said on condition of anonymity.
LIC did not respond to email or phone queries.
Tata Consultancy Services and HCL Technologies slump 7.3 percent each, Infosys is down 5.2 percent, while Wipro is down 4.7 percent.