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Sensex, Nifty50 hold on to gains as market cheers BJP lead in UP; fear gauge cools off

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Sensex, Nifty50 hold on to gains as market cheers BJP lead in UP; fear gauge cools off

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Headline indices Sensex and Nifty50 held on to a majority of intraday gains on Thursday as early numbers from counting of votes in Assembly polls hinted at a win for the BJP in UP. Globally, planned diplomatic talks between Russia and Ukraine buoyed investors' risk-on sentiment.

Sensex, Nifty50 hold on to gains as market cheers BJP lead in UP; fear gauge cools off
Indian equity benchmarks held on to strong gains on Thursday amid strength across global markets, easing crude oil prices, and investors assessing incoming numbers on the results of polls in five states. Globally, updates on the Russia-Ukraine war remained in focus though planned diplomatic talks between Russia and Ukraine buoyed investors' risk-on sentiment.
At 1:40 pm, both headline indices were left with gains of around 1.5 percent, having surged more than 2.5 percent earlier in the day. The 30-scrip index was up 809.4 points at 55,456.8 and the broader Nifty50 benchmark at 16,603.8, up 258.4 points from its previous close.
Earlier in the day, the Sensex came within eight points of 56,250 and the Nifty climbed to as high as 16,757.3 - levels last seen at least a week ago.
Hindustan Unilever, Grasim, Tata Motors, Indian Oil, SBI, Bajaj Finserv and IndusInd - trading with gains of 3-4 percent - were the top blue-chip gainers. On the other hand, Coal India, Tech Mahindra, Hindalco, ONGC and Dr Reddy's -- down around 1-5 percent - were the worst hit among the nine laggards in the Nifty50 pack.
ICICI Bank, the HDFC twins, HUL and Reliance Industries were the biggest contributors to the gain in both headline indices.
Broader markets gave up more than half of their intraday gains, with the Nifty Midcap 100 index quoting 0.7 percent higher. The smallcap index was up 1.2 percent, after jumping as much as 2.5 percent earlier in the day.
In the midcap and small-cap segments, Essel Propack, TTK Prestige, IOC Chem and TCNS Clothing - up 12-14 percent - were the top gainers. Teamlease, Lemontree, Greaves Cotton and Jindal Saw - down 2-5 percent - were the top losers.
Counting of votes for the Assembly elections in Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa is underway. Preliminary data showed Uttar Pradesh Chief Minister Yogi Adityanath is set for a second term with the BJP crossing the 262-mark in the state. The outcome of the polls in five states, UP in particular, is likely to set the tone for the 2024 Lok Sabha elections.
The India VIX -- known in market parlance as the fear index -- tumbled as much as 16.4 percent to almost 23. Late last month, Russia's move to invade Ukraine had sent the volatility barometre surging to as high as almost 34.
Many analysts say a clear win by the BJP in UP is viewed positively for the market. "Markets hate uncertainty and the outcome of these state elections will provide policy continuity and stability," Devarsh Vakil, Deputy Head of Retail Research at HDFC Securities, told CNBCTV18.com.
"As predicted by the exit polls, the market was expecting the BJP to garner a majority in Uttar Pradesh... Based on this mandate, the central government will be buoyed to carry out their agenda confidently and look for opportunities to pursue economic reforms," he said.
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Saurabh Mukherjea of Marcellus Investment told CNBC-TV18 the market is likely to see solid fund flows going forward and a recovery in the economy appears to be gaining momentum. He believes high-quality banking stocks present an excellent opportunity to investors now.
Global markets
European shares began the day weaker despite strong gains across Asia and the US. The pan-European Stoxx 600 index was down 1.1 percent in the early hours.
The UK's FTSE benchmark was down 0.7 percent. France's CAC and Germany's DAX gauges were down 1.2 percent each.
S&P 500 futures were down 0.6 percent.
Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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