Indian shares witnessed a strong rally after initial trends of Lok Sabha election results indicated that Narendra Modi-led Bharatiya Janata Party (BJP) would win majority seats on its own. The BSE Sensex crossed the 40,000-mark for the first time, while NSE’s
Nifty 50 touched the 12,000-mark. However, the benchmark indices failed to hold gains and ended 0.7 percent lower on heavy selling in FMCG, IT and metal stocks. As of 4.30 PM, trends showed that the BJP is set to win around 300 seats, with National Democratic Alliance gaining 350 seats. Analysts said that markets had priced in the victory when it rallied over 3 percent after exit polls were announced. Here are the key takeaways from the stock market today: 1) The BSE Sensex closed 298.82 points, or 0.76 percent, lower at 38,811.39. Intraday, the Sensex surged as much as 1,014.75 points to hit an all-time high of 40,124.96. 2) The Nifty settled at 11,657.05, down 80.85 points, or 0.69 percent, from its previous close. Intraday, the 50-share index 303.25 points to a record high of 12,041.15. 3) The Sensex and Nifty recorded their biggest intraday fall in 11 years. The Sensex and the Nifty fell 1,314 points and 384 points, respectively, from their day’ highs. 4) HDFC Bank, ITC and HDFC were among the top contributors to Sensex losses. IndusInd Bank (5.23), Coal India (1.56), Yes Bank (1.53), Hero MotoCorp (1.51) and Power Grid (1.29) were among the top gainers on the Sensex. Vedanta (5.53), ITC (3.69), HDFC Bank (2.94), Tata Motors (2.48) and Bajaj Finance (2.02) were key losers. 5) FMCG contributed nearly 50 percent to the Nifty’s losses. Adani Ports (5.84), Zee Entertainment (5.55), IndusInd Bank (5.20), Grasim (3.46) and Cipla (2.21) were among the major gainers, whereas Vedanta (5.59), Eicher Motors (4.19), ITC (3.80), Hindalco (3.18) and Bajaj Finance (2.60) were top losers. 6) Among sectoral indices, FMCG, metals, consumer durables, finance and IT led losses up to 1.8 percent. Telecom, capital goods, realty and media advanced. 7) The Nifty Bank fell 1,296 points from its record high of 31,705, posting a biggest intraday fall. 8) India’s benchmark 10-year bond yield was down 4 basis points at 7.22% after touching 7.19% earlier, its lowest level since April 9, 2018, reported Reuters. 9) The Indian rupee settled at 70.01, down 0.5 percent against the US dollar. 10) Analysts said the market may consolidate now. "I do not expect a big correction but definitely, some consolidation for the next couple of months before new cabinet's policies kick in. I feel one big uncertainty has been removed so it becomes a buy-on-dips market again," said Samrat Dasgupta, CEO at Esquire Capital Investment Advisors. He added that staying above the 12,000 level will be difficult for the Nifty 50 as reality check will begin and investors will look at fundamentals and global sentiment.
On profit booking today, market expert S P Tulsian said this is a great time to buy. “Now focus purely on the domestic factors and look for growth. Domestic factors mean look for the government formation, look for who is coming as finance minister, defence minister, home minister etc. and all sort of things, then keep an eye on the budget,” Tulsian said.
Morgan Stanley expects a 15 percent upside from here on with June 2020 target for BSE Sensex at 45,000 and Nifty at 13,500. "This likely continuity in administration is a source of comfort for stocks due to accompanying policy predictability. We expect some shifts in the policy regime," Morgan Stanley said in a report.(
With inputs from agencies)