Mumbai: The equity markets rallied higher to hit yet another record high on Tuesday with the BSE Sensex surpassing its psychological 24K level mark for the first time in the intra-day trade after most of the exit poll results showed the BJP led National Democratic Alliance (NDA) winning a majority in the just concluded Lok Sabha elections.
The Sensex soared 517.94 points in the intra-day trade to hit a life time high of 24,068.94 as overseas investors stepped up their aggressive investing in the domestic equity market ahead of the actual result announcements.
The provisional data from the stock exchanges showed that, foreign institutional investors (FII) bought shares worth Rs 2,026 crore on Tuesday. However, mild profit taking by cautious traders towards the fag end of the trading session saw the Sensex shedding some of its intra-day gains to close the day at 23,871.23, gaining 320.23 points or 1.36 per cent. The Nifty climbed 94.50 points or 1.35 per cent to end the trading session at 7,108.75.
“The markets have now priced in most of the positive news related to the poll out come. Investors who had stayed on the sidelines are now regretting their decision and are waiting for a correction to enter the market,” said Uday Narayan Dubey, vice-president, institutional desk, R.K.Global.
In just three trading sessions, the Sensex has gained 1,527.19 points. “Even if the actual results come in line with the exit poll projection, we can’t expect the markets to register a massive rally from the current levels as sentiments alone can’t drive the markets. It has to be supported by economic fundamentals,” added Mr Dubey.
“If the rally continues without a healthy correction, the markets would become too risky,” pointed out Arun Kejriwal, director, Kejriwal Research and Investment Service (KRIS). According to him, the markets are expected to remain highly volatile ahead of election results. “The kind of economic revival that the markets are expecting once the new government takes charge is not possible overnight. It will take little time,” he cautioned.
