The BSE Sensex soared over 1,000 points to a new record high as the BJP-led National Democratic Alliance headed for a win in the 16th Lok Sabha elections. The 50-share Nifty surged around 300 points to an all-time high of 7,433.
The Sensex crossed the psychological 25,000 for the first time. The Indian rupee traded at a 10-month high of 58.81 per dollar, after earlier rising to 58.72 to the greenback. (Live blog on markets)
According to latest trends, Narendra Modi-led NDA is leading in 272 seats, wining 139 more seats as compared to 2009 elections. That will be enough to form a majority government. The Congress-led United Progressive Alliance was leading in 83 seats, down 133 seats from last elections.
“It’s a good sign that BJP and its allies are headed for majority… There is a sense that the Narendra Modi government will be able to deliver what has been promised,” said Madan Sabnavis of Care Ratings.
Indian stock markets have been on a roll on hopes that a stable government post elections in May would pull out all stops to bring the country’s sluggish economy on track. Analysts expect a revival in investment cycle and fast-tracking of reforms under the new regime.
The rally in markets has come on the back of strong buying by overseas investors. Foreigners betting on a BJP victory have poured more than $16 billion into Indian stocks and bonds in the past six months and now hold over 22 per cent of Mumbai-listed equities – a stake estimated by Morgan Stanley at almost $280 billion.
Banking stocks led the bull charge on the Dalal Street, up over 6 per cent. Energy and consumer durable stocks traded with over 4 per cent gains.
On the Nifty, 49 of the 50 stocks traded higher. State-run Punjab National Bank was up 8 per cent, while State Bank of India traded 7 per cent higher.