The stock market ended the week on a euphoric note after Narendra Modi-led BJP stormed to victory in the Lok Sabha polls. The Sensex gained 624.33 points on Friday to 39,434.72, taking the overall gains in the week to nearly 4%. Interestingly, the Sensex added a whopping 1,504 points in the week or about 3.9% buoyed by the sentiment around Modi’s victory. The Nifty has added a robust 437 points in the week, or about 3.83%. Yesterday, the Sensex and Nifty scaled new lifetime highs. The 30-share index touched a new all-time high of 40,124.56, while the Nifty touched a fresh peak of 12,041.15. The Sensex’s achievement came just days after it had hit a peak of 39,571.13 on Monday buoyed by exit poll results over the weekend, even as the Nifty moved to 11,883.55 on the same day.
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However, the week has also seen extensive volatility. Yesterday, the Sensex registered its biggest intra-day in more than 11 years, slipping from the day’s high to end in the red by about 298 points. The volatility index also posted its biggest one-day fall since 2014 on poll result day. According to market experts, profit booking was the most important factor behind the steep fall. Notably, in the week on Monday 20th May 2019, the Sensex and Nifty posted their best day in over 10 years on Modi’s exit poll win. The Sensex added about 1,422 points, while Nifty added 420 points on the day.
The week has also seen unprecedented gains in the leading indices in an election week. A rally in shares of IndusInd Bank, ICICI Bank, HDFC, HDFC Bank, L&T, Adani Ports and SBI contributed mainly to the rally. IndusInd Bank (20%), L&T (13.38%), Adani Ports (11.75%) and SBI (11.31%) and ICICI Bank (10.79%) were among the top 5 Nifty gainers in the week. Tech Mahindra, ITC, TCS, DRL, Infosys were among the biggest Nifty losers, shedding up to 6.25% in the period.
Many Nifty stocks touched fresh record highs in the week including ICICI Bank (Rs 433.35), L&T (Rs 1,562.40), Bajaj Finance (Rs 3,518), Axis Bank (Rs 804) and UPL (Rs 1,403). The Nifty Bank index hit a new record high of 31,705 yesterday. However, with the election uncertainty out of the way, the focus will now shift back fundamental micro and macro factors, say experts. It remains to be seen whether the leading benchmark indices extend gains on Monday, or retreat from these levels.