Mumbai: Follow-up buying on Monday after landslide win by BJP-led NDA in 16th Lok Sabha election pushed the equity benchmarks as well as CNX Midcap Index at another record closing high.
PSU, infrastructure, banking & financials and commodity stocks saw hefty buying while major selling pressure was seen in technology, healthcare and FMCG stocks. The market gained for the third consecutive session.
The Sensex advanced 241.31 points or 1 percent to close at 24363.05 and the Nifty rose 60.55 points or 0.84 percent to 7263.55 while the broader markets beat benchmarks. The CNX Midcap Index climbed 4.25 percent to 9,908.40 and BSE Smallcap was up 5.82 percent to 8344.70.
Most of brokerage houses raised benchmarks' target for the calendar year after Lok Sabha election results. They feel the market may not see major correction from here on and in fact it may double in next four-five years. Goldman Sachs has raised its 12-month target for the Nifty to 8,300 from 7,600 earlier and retained its 'overweight' stance on India. In its strategy note to clients today, the brokerage said it sees increased FII flows and retail participation in the coming days.
Meanwhile, Arvind Sanger, managing partner, Geosphere Capital Management says at the moment the market is in a multi-year bull run. He advises investors to buy on every dip. He sees the Nifty doubling in the next four-five years.
According to him, the only downside risks would be any macro event that can cause global risk off and India specific events - the government disappointing in terms of its economic policies and rising inflation. Shares of public sector undertaking (PSU) companies were completely on buyers' radar with the BSE PSU index rising 9 percent. Power and Capital Goods indices gained 10 percent and 9 percent, respectively. Realty, Metal and Oil & Gas were up 5-7 percent.
Bank Nifty closed above the 15000 level for the first time ever, up 2.5 percent to 15222. However, BSE IT, FMCG and Healthcare indices were down 4-5 percent. State-run power equipment maker BHEL topped the buying list, rising 17 percent followed by Coal India with 13 percent. NTPC, ONGC, Tata Power and Punjab National Bank rallied 8-10 percent.
However, the fall in technology shares was attributed to rupee appreciation and profit booking. TCS, Infosys, Wipro and HCL Technologies plunged 4-6 percent.Among others, ITC, Dr Reddy's Labs, Sun Pharma and Hindustan Unilever were down 4-5 percent. Among midcaps, Jaiprakash Power Ventures shot up 30 percent despite March quarter losses widened to Rs 172 crore from Rs 122.3 crore year-on-year.
KSK Energy Ventures, MMTC, Edelweiss Financial (board hiked FII investment limit in company to 40 percent from 28 percent) and JK Cement (after 36 percent rise in net profit to Rs 76.4 crore Y-o-Y) spiked 20 percent each. In the smallcap space, IFB Industries, Indian Metals, Ansal Properties, Dalmia Bharat and Apar Industries were up 20 percent each. Meanwhile, the Indian rupee was trading at 58.49 a dollar (11-month high), up 29 paise compared to previous close, at 16:15 hours IST. Advancing shares outnumbered declining ones by a ratio of 2155 to 717 on the Bombay Stock Exchange.
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