Nifty hits record closing high to end above 9,050 for first time ever

The broad market depicted strength. 1,686 shares rose and 1,135 shares fell

The benchmark Nifty50 index on Tuesday closed above its crucial 9050-mark for the first time ever as investors saw Prime Minister Narendra Modi's landslide victory in the Uttar Pradesh as an indication of him winning a second term in office in Lok Sabha elections 2019.

In intraday trade, the Nifty50 rose as much as 2% to hit its record high of 9,122 points surpassing its previous peak of 9,119 hit on March 4, 2015. The S&P BSE Sensex, meanwhile, gained 615 points to 29562 during the day, 463 points shy of its lifetime high of 30,025-mark. 

The 30-share Sensex settled the trade at 29,443, up 496 points, while the broader 50-share Nifty ended at 9,087, up 152 points. 

In the broader market, The BSE Mid-Cap and BSE Smallcap indices underperformed the frontline indices by rising 1.4% and 1.2%, respectively. 

The market breadth, indicating the overall health of the market, remained strong. 1,686 shares rose and 1,135 shares fell. A total of 224 shares were unchanged.

The India volatility index (VIX), a gauge of the market's short-term expectation of volatility, fell over 11%. 

The market is trading at a price-to-earnings ratio of 19.85 over the next 12 months, compared with their five-year historic average of 17.8, according to Thomson Reuters data.  

"The Market easily held on to its strong gap-up today with no volatility and has signs of being extended in the near-future as new money from both FIIs and DIIs continue to pour in spite of high valuation. Valuation may continue to be high unless being impacted by external or domestic factors. This euphoria is strong enough to improve investment sentiment given longevity in reform over the long-term," said Vinod Nair, Head of Research, Geojit Financial Services.

Sectors and stocks 

Among sectoral indices, Nifty Bank logged its record closing high to end above 21,000, up nearly 2%. ICICI Bank (up 6%), YES Bank (up 3%) and Federal Bank (up 2%) contributed most to the gains.  

Nifty Pharma index gained nearly 2% led by gains in Sun Pharma (up 3%) after the company said the US health regulator will lift the import alert from Mohali facility to permit the supply of products to the US market.

Adani Enterprises added 3.5% to Rs 97 after the company applied for financing from an Australian infrastructure fund to build a rail line that is part of a $16 billion coal project in the state of Queensland.

NBCC (India) rallied nearly 5% to Rs 178 after the state-owned company said it has secured a contract worth about Rs 250 crore in Mauritius.

Among losers, Alkem Laboratories fell over 2% to Rs 1,931 after the company said the US health regulator has inspected its Baddi plant and issued three observations on account of violation of good manufacturing norms.

Inflation edges up

Inflation based on wholesale prices shot up to 39-month high of 6.55% in February because of costlier food and fuel items.

The Wholesale Price Index based inflation, reflecting the annual rate of price rise, in January was at 5.25%

According to the official data released today, food prices witnessed a sharp rise by 2.69% in February as compared to a deceleration by 0.56% in the previous month.

BJP's big victory

The BJP won an unexpectedly high 312 out of 403 seats in the assembly elections of India's largest state, Uttar Pradesh, raising expectations of continued political stability, smooth implementation of a proposed goods and services tax (GST) and reforms in areas such as labour laws and land acquisition.

BJP registered a massive victory in two states, winning 312 seats with 39.7% votes in Uttar Pradesh and 57 seats with a huge 46.5% votes in Uttarakhand. The BJP could not hold on to power in Goa and lagged behind the Congress, winning 13 of the 40 assembly seats. In Manipur, a state where the BJP had no presence in the 2012 elections, it managed to win 21 of the 60 assembly seats.

Global markets

European markets opened lower as investors looked ahead to a rate decision by the US Federal Reserve. The pan-European Stoxx 600 and France's CAC 40 was down 0.3% each, while Britain's FTSE 100 rose marginally. 

Asian markets settled the day flat. The MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2% while Japan's Nikkei closed down 0.1%. China's Shanghai Composite and Hong Kong's Hang Seng indices were little changed.