Overseas investors continued with their aggressive stock picking at the centre post Lok Sabha elections
Bombay Stock Exchange
Mumbai: The equity markets rose to a new high on Wednesday as overseas investors continued with their aggressive stock picking in cyclical sectors like banking, metal and capital goods expecting a strong and stable government at the centre post Lok Sabha elections. The BSE Sensex climbed 358.89 points or 1.61 per cent to close at a historic high of 22,702.34 points while the NSE Nifty zoomed past its psychological 6,700 levels to close at a new high of 6,796.20, gaining 101.15 points or 1.51 per cent.
While maintaining a long term positive outlook for the markets, Jyotivardhan Jaipuria of Bank of America Merrill Lynch said that the strong pre-election rally has largely played out and expects the equity markets to correct by 5 per cent by May 16, the counting day as inves-tors would trim some positions to hedge against an unexpected election results.
Though the current rally is expected to continue for some more time, Ambareesh Baliga, managing partner, global wealth management, Edelweiss Financial Services said that the markets risk reward ratio won’t be very favourable at higher levels. “So, investors who had already invested in the market and sitting on decent gains should look at taking some profits off the table,” he said adding that a major correction for the markets looks unlikely at this stage.
The provisional data from the stock exchanges showed that foreign institutional investors purchased shares worth '1,043 crore on Wednesday.
“It’s the euphoria before the election outcome that’s moving the market and nobody knows how much more can come. The stock indices are in new territory without any upside barrier.
Now we have even started to see new money coming into the market and everyone expects that the Indian economy would be in good shape after the Lok Sabha polls,” said Vinod Nair, head of fundamental research, Geojit BNP Paribas Financial Services.
( Source : dc correspondent )
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