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Investors continued to book profits in financials and index heavyweights which had pushed the Sensex above 25,000 and the Nifty above 7,500 in early trades.
Further, IT exporters continued to remain under pressure after the sharp appreciation in the Indian rupee.
At 11:35AM, the 30-share Sensex was up 767 points at 24,673 after hitting an intra-day high of 25,376 and the 50-share Nifty was up 240 points at 7,363 after touching an intra-day high of 7,563.
"On Nifty, we have seen a breakout above 7,000 levels. The momentum has been confirmed and the trajectory of the market has now shifted from 5,500-6,300 to 6,500-7,800. Banking stocks will be the prime beneficiary of this rally," said Harendra Kumar. Managing Director - Institutional Equities, Elara Capital.
ICICI Bank, HDFC Bank, SBI, Axis Bank were up 6.5% each contributing the most to the Sensex gains.
Among the index heavyweights Reliance Industries was up 4.6%, ITC gained 1.7% and L&T surged 3.8%.
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(Updated at 10:40AM)
Benchmark share indices came of their record highs as investors booked profits after the Sensex breached 25,000 and the Nifty topped 7,500 as leads indicate the pro-reform and business friendly BJP is set get a majority and form a stable government.
At 10:40AM, the 30-share Sensex was up 1019 points at 24,924 after hitting an intra-day high of 25,376 and the 50-share Nifty jumped 300 points at 7,423 after touching an intra-day high of 7,563.
As per the reports coming in, the BJP was leading in 150 seats out of 285 seats for which trends were available across the country. The ruling Congress was lagging behind with leads in only 36 seats.
"Nifty has seen strong move by more than 400 points and made a new record high of 7563 levels. We are observing strong momentum but traders are advised to reduce position to buy it again on declines. Now previous high 7200 is likely to act as a support zone. Banknifty moved by 10% during the session as it crossed immediate hurdle of 14600 zone. Call unwinding seen in 7000 to 7500 strike but oi is intact at 7600 strike which indicates now traders would force to remain below 7600 levels. Indiavix fell down by 32% from 36.76 to 25 levels and now option price are fairly priced and traders are advise to use option for further trading. In this series nifty is up by aroud 10% and far away from uts monthly vwap so now expiry would be more of momentum and next volatility may spike in expiry week," says Chandan Taparia, derivative analyst at Anand Rathi.
The Indian rupee gained sharply against the US dollar following the sharp gains in equity markets and hopes of further inflows from foreign institutional investors. The rupee was trading higher at Rs 58.71 compared to its previous close of Rs 59.29.
Asian markets were trading lower with the Nikkei down 1.8% on the back of profit taking and a stronger yen. The Shanghai Composite was down 0.3%, Hang Seng slipped 0.7% and Straits Times was down 0.4%.
Financials extended gains were the top gainers on the Sensex on hopes that the BJP-led NDA would unveil reforms and stimulate economic growth.
ICICI Bank was up 9%, HDFC Bank was up 8%, HDFC was up 5%, SBI was up 8%, Axis Bank was up 8% contributing the most to the Sensex gains.
Among index heavyweights Reliance Ind was up 6%, while ITC was up 2.8% after rising over 4% in early trades. Other gainers include, L&T, ONGC, Tata Motors, Maruti Suzuki, Bharti Airtel and Hero MotoCorp among others.
IT shares retreated after the rupee appreciated sharply against the dollar following the sharp gainsi in equities. TCS, Wipro, Infosys were down 1.2-3% each.
In the pharma pack Dr Reddy's Labs was down 1.6% at Rs 2,443.
Among other shares, Budget carrier SpiceJet today announced another sale offer, sixth in a row since January, with all-inclusive fares as low as Rs 1,899 from select cities including Chandigarh, Guwahati, Jaipur and Lucknow. The low-cost airlines also announces its March quarter results today. The stock was up 2.3% at Rs 15.50.
Arvind Limited was up 1% at Rs 192. The company posted a 11.49 per cent growth in its standalone net profit for the fourth quarter ended March 31, 2014. The company saw its Q4 standalone net profit for the fiscal year 2013-14 rise to Rs 94.89 crore, up from Rs 85.11 for the corresponding period last fiscal 2012-13.
Zydus Wellness was down 3% at Rs 505. The healthcare firm posted 41.83% decline in consolidated net profit at Rs 21.76 crore for the quarter ended March 31, 2014. The company had posted a net profit of Rs 37.41 crore for the quarter ended March 31, 2013, Zydus Wellness said in a filing to BSE.
In the broader market, the BSE Mid-cap index was up 2.5% and Small-cap index gained 1.5%.
Market breadth was positive 1,211 gainers and 792 losers on the BSE.
