Mumbai: Indian shares surged at a phenomenal pace on Monday after multiple exit polls showed that Prime Minister Narendra Modi will retain power with a bigger majority in Parliament.
The S&P BSE Sensex opened at 38,701 and galloped 1,422 points through the day to close at 39,353. The Nifty 50 too surged 421 points to wind up at 11,828.
The polls on Sunday predicted that the BJP-led National Democratic Alliance (NDA) is likely to clinch over 300 seats in the just-concluded Lok Sabha elections, forming a stable government for the next five years.
At the National Stock Exchange, all sectoral indices were in the green. Nifty PSU banks gained 7.7 percent, realty 5.7 percent, financial service 4.5 percent and bank 4.4 percent.
Among stocks, Adani Group was one of the top outperformers with Adani Enterprises gaining over 24 percent backed by a heavy addition of long positions.
Indiabulls Housing Finance zoomed ahead close to 13 percent, IndusInd Bank over 9 percent, Adani Ports and State Bank of India over 8 percent and Tata Motors about 7.5 percent. Those who lost were Dr. Reddy, Bajaj Auto, Tech Mahindra, and Infosys.
Reports said stock exchanges and the Securities and Exchange Board of India (SEBI) have stepped up surveillance mechanisms to check any manipulative activities or excessive volatility in the markets.
A second term for Prime Minister Modi will mean endorsement of his policies on various fronts — especially on national security after serious skirmishes with Pakistan escalated earlier this year, rural reflation, infrastructure spending and streamlining of goods and services tax (GST).
Foreign institutional investors also believe that a stable government will lead to decisive governance and continuing reforms in the world’s fastest-growing economy. But they are expected to remain cautious ahead of May 23, the day on which final outcome of the general elections will be declared.
The euphoria at Indian stocks was despite weak global cues. Asian equities remained on the edge as investors awaited the next chapter in US-China trade dispute.
Japan’s Nikkei showed marginal gain after GDP data showed 2.1 percent rise in the first quarter, stock markets in China and Hong Kong were in the negative zone after the Trump administration last week added Huawei Technologies on the trade blacklist.