Sensex hits all-time high on auto rally, BJP poll victory in Gujarat and Himachal Pradesh

The previous closing high was on November 6 when it had finished at 33,731.19.

Sensex, Nifty, Sensex points, BSE index, share market, business news, BJP, Narendra Modi, Gujarat elections results, HImachal Pradesh elections results

After Monday’s 1,000 point intra-day rally, the 30-share Sensex rose 235.06 points, or 0.70 per cent, to close at a new high of 33,836.74.

Driven by auto and consumer durable shares, stock market on Tuesday rallied further to hit an all-time high as investors stepped up purchases following the BJP’s electoral success in Gujarat and Himachal Pradesh and rising hopes of more reforms.

After Monday’s 1,000 point intra-day rally, the 30-share Sensex rose 235.06 points, or 0.70 per cent, to close at a new high of 33,836.74. It had risen 548.64 points in the last three sessions. The previous closing high was on November 6 when it had finished at 33,731.19. The broader Nifty gained 74.45 points, or 0.72 per cent, to end at a fresh peak of 10,463.20, breaking its previous record of 10,452.50 hit on November 3.

According to investors, the market is expecting the next set of reforms in the Union Budget scheduled in February. Risk appetite grew as the BJP is set to form government in Gujarat and Himachal Pradesh.

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Vinod Nair, head of Research, Geojit Financial Services, said, “Euphoria from election verdict and progress in US tax cut fuelled the market to rally near the all-time high. Auto stocks drove the market from the forefront while small and mid cap outperformed on expectation of improvement in rural demand on the back of continued government reforms. Strengthening rupee and positive global cues will continue to attract domestic liquidity.”

“With elections led volatility subsiding risk appetite resurfaced and perked up stocks while global equities’ positivity also added momentum. Autos led the charge while difference in opinion over the FRDI Bill restrained banking stocks, but Winter Session is likely to keep market interested,” said a dealer. On the sectoral front, auto climbed by 3.48 per cent. The auto rally comes amid the year-end discounts offered by carmakers to finish inventories. Realty was up 1.62 per cent, metal 1.46 per cent, infra 1.02 per cent, media 0.92 per cent, FMCG 0.91 per cent, pharma 0.75 per cent, energy 0.64 per cent, private bank 0.59 per cent and bank 0.48 per cent.

Jayant Manglik, president, Retail Distribution, Religare Securities, said, “Benchmark indices edged higher after BJP’s victory in Gujarat and Himachal Pradesh on rising hopes of continuous reforms in the coming months. The Nifty index inched closer to test fresh lifetime highs. Barring IT, all the major indices saw buying interest. Auto and consumer durables were the best performing indices. The broader market indices; i.e. BSE Smallcap and BSE Midcap hit lifetime highs with sharp rally during the second half of the trading session.”

Going ahead, with Assembly elections out of the way, focus will now shift to macro numbers and earnings recovery. Also after a close fight in the state election, market participants would be expecting a populist budget by the BJP government focused on rural economy.