)
The markets have galloped to 31-month highs this afternoon, led by spectacular gains in index heavyweight RIL and bolstered by a runaway rally in the banking stocks. The Sensex hit a new high of 23,020, stronger by 673 points and the Nifty is Nifty has hit 6870 up 210 points. In the process, the benchmark indices are actually outperforming the broader market space; the midcap index is at 7438, higher by 90 points and the smallcap index is at 7594, up 54 points. All the sectoral indices are in the green, with the sole exception of the pharma space. RIL, ICICI Bank and Axis Bank are trading at 52-week highs. The Bank Nifty has gained over 4%, which is the highest percentage gain since March 7.
After a muted start, the benchmark indices have gained momentum ahead of exit poll results next week. The TV interview of Narendra Modi on Thursday, in which he exuded confidence that the BJP would win with a clear majority and form the strongest and most stable government since Rajiv Gandhi's time, would have pumped up the sentiment. And on a day when the markets were on a tear, the VIX also raced ahead by a whooping 11% to 38 points, in what marks a surprising departure from the traditional inverse relationship between market direction and volatility index.
The markets have been in a state of limbo for the past month and were expected to drag their feet till the D-Day i.e. May 16.
But the day's rally would have left many participants unaware and caught the bears on the wrong foot. However, once the election event are out of the way, the focus will return to macros and impending monsoons.
On the global front, the Asian shares were mostly down on Friday as a tense situation in Ukraine made investors cautious, though markets took a tame Chinese inflation report in their stride despite the implications for weakening demand in the region's economic powerhouse. And the European markets had opened flat, with a negative bias.
The financials are in the limelight this afternoon. ICICI Bank has surged 5.6% at Rs 1362, its highest level since 2008 on the BSE, to top the gainers list on the BSE. HDFC has soared by 3.8% at Rs 881 and HDFC Bank has gained 3.7% at Rs 745.
Reliance Industries (RIL) is trading at three-year highs and is inching towards Rs 1,000 mark. The stock is at Rs 991, up 3.1%, on the BSE.
In the midcap space, Yes Bank has jumped by 10.3% at Rs 488, J&K Bank has added 7.7% at Rs 1815, Indian Bank has added 5.3% at Rs 123 and Union Bank has added 5.1% at Rs 142.
The defensive pharma stocks are bucking the strong trend; Dr Reddy's and Sun Pharma are trading flat, with a negative bias, at Rs 2719 and Rs 623 respectively.
The market breadth is strong. Out of 2652 stocks traded on the BSE, there are 1477 advancing stocks as against 1038 declines.
