India’s benchmark indices Sensex and Nifty recovered all of their losses in the wee hours of trading as latest vote count showed Narendra Modi led BJP leading the charge against Rahul Gandhi’s Congress in Gujarat and Himachal Pradesh assembly elections. BSE Sensex inched up 240.54 points to hit the day’s high of 33,703.51 while NSE Nifty gained 149.2 points to mark the day’s high of 10,412.3. The heavyweight shares of companies such as HDFC Bank, ICICI Bank, Reliance Industries, L&T, M&M, and State Bank of India contributed the most to the key indices recovery trend. Collectively these seven stocks alone added about 140 points out of the 192-point gain in the index.
Shares of M&M, Adani Ports, Tata Steel, HDFC Bank, Asian Paints, L&T, ICICI Bank, Dr Reddy’s emerged as the major gainers on Sensex, advancing up to 1.8% while on the other hand, Power Grid, TCS, Wipro, IndusInd Bank, Yes Bank declined up to 0.8%. Almost all the sectoral indices of NSE traded higher except Nifty IT with Nifty Media, Nifty Metal, Nifty Bank, Nifty Pharma leading ahead. In the early trades, Sensex and Nifty lost heavily on Monday following mixed sentiments of investors as vote counting for the assembly elections in Gujarat and Himachal Pradesh witnessed a neck to neck position or BJP and Congress. BSE Sensex after shedding 98.45 points or 0.29% in opening trades tanked as much as 867.34 points to hit the day’s low of 32595.63 whereas NSE Nifty plummeted 188.3 points to hit the day’s low at 10,074.8.
Word on the street is that a strong or even a comfortable win for BJP in Gujarat will boost the market sentiment in the short term. Nifty may fly past the level of 10,490 if the actual results for BJP are even better than what exit polls showed. BJP is seeking a sixth straight term in office, the Congress is aiming to stage a comeback in power after being in the opposition for over two decades. A relief rally is underway in the market. A potentially convincing win, which is 110+ seats for the BJP in a state perceived to be most impacted by GST/demonetisation should at best, and will only boost market sentiment. Mahesh Nandurkar, India Strategist, CLSA.
Meanwhile, The Indian rupee crashed as much as 68 paise against the US dollar on Monday as investors turned cautious over the outcome of Gujarat State election results. The rupee plunged heavily in the opening session on Monday, diving as much as 68 paise to 64.72 against the US dollar after early trend suggested that the BJP and the Congress are neck and neck in Gujarat Assembly sweepstakes after one hour of counting of votes. Later in the day, as the counting progressed, Indian rupee recovered most of its losses, trading 10 paise down at 64.14 apiece US dollar.
The much-awaited results of keenly fought assembly elections in Himachal Pradesh and Gujarat will be out today. In both states, PM Narendra Modi led the campaign for the BJP, while Rahul Gandhi was the pivot of the Congress’ electioneering. During the campaign in Gujarat, Modi and BJP chief Amit Shah trained guns on the Congress on issues like Ram Temple, alleged Pakistani interference in the Gujarat polls and (suspended Congress leader) Mani Shankar Aiyar’s remarks.