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The bulls are on a rampage this morning as exit polls unveiled on Monday evening predicted that India is on the cusp of political change, with a Modi-led NDA dispensation set to cross the magic mark of 272 in the just-concluded elections. The Sensex is at fresh all-time highs at 23,858, stronger by 302 points and ditto with the Nifty, which is at 7100, up 85 points and the Bank Nifty, which is at 14104, up nearly 100 points. The midcap index is at 7610, up 99 points and the smallcap index is at 7717, up 84 points. All the sectoral indices are in the green, with banking taking the lead.
The Sensex supplemented the 650-points rally on Friday with another 557 points in the previous session and 300+ points this morning to make it an eye-popping 1500+ points gains within three sessions. The run-up has been driven by hopes of a business-friendly and pre-reform NDA government headed by Narendra Modi assuming charge post May 16. And with the exit polls indicating as much, unless they veer hopelessly off tangent as was the case both in 2004 and 2009, the markets seem headed to stratospheric levels in the days to come.
The counting of votes will take place on Friday, 16 May 2014, and the results are expected on the same day. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
The capital goods and metal stocks are back in the reckoning this morning. Bhel has sky-rocketed by 8.1% at Rs 214 to top the gainers list on the BSE on speculation that the cabinet would ratify the decision to sell 4.66% stake in the power equipment maker through a block deal. The proposal for post-facto approval for BHEL disinvestment is apparently on the agenda of Tuesday's Cabinet Committee on Economic Affairs (CCEA) meeting. NTPC has added 4.6% at Rs 126, Tata Power has gained 3.6% at Rs 84 and L&T has added 1.4% at Rs 1406. In the metal space, Tata Steel has gained 4.1% at Rs 437 and Hindalco has added 2.4% at Rs 147.
Oil and gas shares are extending their rally for the third day in a row, with ONGC, RIL, Oil India, IOC, HPCL, BPCL and Gail adding 2-6% each on the Bombay Stock Exchange (BSE) after diesel prices were hiked by Rs 1.09 a litre on Monday, excluding state levies. ONGC has gained 6% to Rs 380, also its lifetime high on the bourses, while Reliance Industries gained 2% at Rs 1,050 on the BSE. Oil India has surged 5% to Rs 535, followed by Gail India (4% to Rs 400) and BPCL (2% at Rs 513).
Ditto with the financials space, with SBI jumping by 2.1% at Rs 2290, HDFC gaininhg 1.8% at Rs 908, ICICI Bank adding 1.1% at Rs 1415 and Axis Bank adding 1% at Rs 1664.
Bharti Airtel has jumped by 1.7% at Rs 323 on the news that it raised up to $1.5 billion this week in euro and dollar bonds to refinance old loans. Bankers said the bonds to be issued by Bharti Airtel International (Netherlands), a subsidiary of Bharti Airtel, had received bids almost double the proposed issue size.
Tata Motors has firmed up by 1.6% at Rs 452 after JLR April global retail sales were up 30%.
Bank of Maharashtra is going strong at Rs 39, up 3%, on the BSE on the news that the Board of Directors in its meeting to be held on May 13, 2014, may also consider the matter of raising equity capital by way of preferential issue of equity shares to LIC of India.
Torrent Cables is locked in upper circuit of 10% at Rs 113, also its 52-weeek high on the BSE, after board approved amalgamation of the company with Torrent Power.
On the other hand, the laggards on the BSE are Dr Reddy's (down 1.5% at Rs 2677) and Coal India (down 0.6% at Rs 328).
Finolex Industries has plunged over 9% to Rs 210 after reporting 29% year on year (yoy) decline in net profit at Rs 56 crore for the quarter fourth quarter ended March 31, 2014 (Q4), due to higher raw material and finance costs. The plastic products maker had reported a profit of Rs 79 crore in the same quarter last year.
The March quarter results to be announced later in the day include, Dr Reddys Labs, PNB, Bank of Baroda, Nestle and Tata Comm among others.
The market breadth is strong. Out of 1163 stocks traded on the BSE, there are 868 gainers as against 250 losers.
