Despite mixed global cues and capital outflows, the BSE Sensex on Friday soared 537 points and the NSE Nifty closed above the 11,400 level in a broad-based rally ahead of exit poll results. Analysts said the markets are pricing in the formation of a stable government.
Investors bought into banking and auto stocks amid short-covering ahead of the exit poll results scheduled for Sunday. The 30-share BSE benchmark closed 537.29 points, or 1.44 per cent, higher at 37,930.77. Similarly, the broader Nifty rose 150.05 points, or 1.33 per cent, to settle at 11,407.15.
During the week, the Sensex gained 467.78 points, or 1.24 per cent, and the Nifty advanced 128.25 points, or 1.13 per cent.
Vinod Nair, head of research, Geojit Financial Services, said, “Despite global volatility, domestic market extended the surge due to continued accumulation in blue chips by domestic investors and short covering ahead of exit poll on Sunday. Auto and FMCG outperformed in expectation of ease in interest rate from RBI and prospects of near-normal monsoon. Having said that, investors remain focused on final election results for short term direction in the market.” “There was heavy short-covering ahead of the exit poll results,” said an analyst.
“Indian markets have been on a shaky ground for the past couple of days driven by ambiguity associated with the US-China trade negotiations and less-than-inspiring ongoing corporate earnings season. Further, the ongoing election season is another major variable that markets are watching closely. In the current scenario, it’s critical that market participants keep resources handy to take advantage of opportunities once stability revives,” said Jagannadham Thunuguntla, head of research (wealth), Centrum Broking.
Sectorally, the BSE auto, FMCG, finance, bankex and capital goods indices ended up to 2.45 per cent higher. However, healthcare, IT and teck lost up to 0.99 per cent. Broader indices followed the benchmarks, with the BSE mid-cap and small-cap indices settling in the green.
Jayant Manglik, president, Religare Broking, said, “Markets showed tremendous strength and gained nearly one and half per cent amid mixed cues. Participants took note of Finance Commission’s report which states that India’s GDP shows sign of continue growth despite volatile global trend. Besides, encouraging earnings announcements further boosted the sentiment. A mixed trend was witnessed on sectoral front wherein media, FMCG, auto and bank posted decent gains while IT, pharma and metal ended lower.”
Bajaj Finance was the top gainer in the Sensex pack and surged 6.09 per cent, after the company reported a 50 per cent jump in net profit for the March quarter. Hero MotoCorp, Maruti, Kotak Bank, HDFC, HUL, M&M, HDFC Bank, ITC, ICICI Bank, Axis Bank, Coal India, SBI, IndusInd Bank and Asian Paints rose up to 4.26 per cent.
According to Jimeet Modi, founder & CEO, SAMCO Securities, markets consolidated this week after assimilating the US-China trade spat in a more matured manner. “Surprisingly India had mirrored global markets since the beginning of May this year. Therefore, irrespective of the election outcome, save and except one day knee-jerk reaction, Indian markets will continue to mirror global financial markets going forward as well,” Modi said.
Asian markets were mixed on Friday as another rally on Wall Street and data indicating a strong US economy were offset by the increasingly tense trade and technology stand-off between China and the US. While Japanese stocks rose, bourses in China and Korea ended in the red.
European equities too opened significantly lower. The long-running Brexit saga also moved back into view, with the pound sinking to three-month lows on renewed concerns Britain will leave the EU with no deal as Prime Minister Theresa May tries to push her divorce deal through again.