By Abhishek Vishnoi
MUMBAI (Reuters) - The Nifty and Sensex surged to their second consecutive record high on Monday as blue-chips such as Larsen & Toubro jumped on rising hopes that exit polls would show the Bharatiya Janata Party and its allies winning a majority in the elections.
The Sensex rose as much as 2.52 percent to a record high at 23,572.88, while the Nifty rose as much as 2.35 percent to a life high of 7,020.05, surpassing its previous record hit on Friday.
The optimism comes even as exit polls by media organisations - due to be released after 6:30 p.m. on Monday once the last votes are cast - have proven unreliable in the past. Actual results for India's five-week long elections are due on Friday.
A win for a BJP-led coalition is widely seen as setting the stage for a revival in confidence, investment and growth as Asia's third-largest economy steers through a rough patch.
The Nifty has surged 18.74 percent since Narendra Modi became the BJP candidate on Sept. 13, as the opposition party is perceived by markets as being more business friendly at a time when the economy is growing at its slowest pace in a decade.
"Markets got a wind of exit poll showing a clear majority for the BJP-led allies, which got extrapolated as better growth prospects for India," said Deven Choksey, managing director at K R Choksey Securities.
The Sensex ended up 2.42 percent (or 556.77 points) at 23,551, while the Nifty ended 2.27 percent higher (or 155.45 points) at 7,014.25, adding to their over 3 percent gains on Friday.
Gains were broad-based, with 25 out of 30 listed companies on the benchmark BSE index posting rises.
However, risk was also seen increasing as NSE's volatility index, or India VIX, hit its highest intraday level since March 11, 2009, before ending 1.6 percent lower.
Also on watch, consumer price inflation data due later in the day, the last one before the RBI's next policy review on June 3.
Domestic-oriented shares led the rally, with the NSE bank sub-index hitting a record high. State Bank of India Ltd gained 3.2 percent, while Larsen & Toubro Ltd rose 3.3 percent.
Infrastructure shares also gained, with Ambuja Cements up 2.1 percent, while state-run power equipment maker Bharat Heavy Electricals Ltd surged 2.4 percent.
Reliance Industries Ltd gained 3.1 percent after the company and its partners in a gas block said on Saturday they were taking the government to arbitration seeking implementation of higher gas prices.
However, United Spirits Ltd fell 2.8 percent after it agreed to sell its Whyte & Mackay scotch whisky unit to Emperador Inc in a 430 million pound ($729 million) deal, a valuation that was seen as lower than estimates by some analysts.
(Editing by Anand Basu)
