Nifty and Sensex ended at new closing highs Friday, but shed
much of the intra-day gains despite the BJP-led NDA coalition winning by a much
bigger margin than expected.
The Sensex closed at 24121.74, up 216.14 points over its
previous close after hitting a record high of 25375.63 intra-day high minutes
after trading began. The Nifty settled at 7203, up 79.85 points after making a
new peak of 7563.50 intra-day.
The best performers were realty, capital goods, banks, power
and oil & gas shares, while investors dumped shares of defensive sectors
like IT, FMCG and pharma anticipating a shift in money into cyclical stocks.
Sectoral indices for IT, FMCG and pharma all closed in the
red, underscoring the sudden change in investor preference. In a reminder of
the problems still facing the corporate sector, the Supreme Court ordered an
interim ban on 26 mines in Odisha operating on second deemed renewals.
Here are the Star performers of the day on election result:
Sesa Sterlite – 11%
PNB – 7 %
BPCL – 7 %
BHEL – 6 %
DLF – 6 %
Tata Steel has been falling down by 4% and become the top losers in Nifty, as the company sources a big chunk of its iron ore requirements from
Odisha.
Here are the Big Losers of the day on Election Result:
ITC – 3 %
Dr Reddy’s – 3 %
Infosys – 3 %
HCL Tech – 3 %
Dr Reddy’s – 3 %
Infosys – 3 %
HCL Tech – 3 %
IT stocks were hit the hardest as it felt that increased
foreign capital flows in the coming days, as a result of NDA victory, would
strengthen the rupee and hut the sector’s profitability. Profit booking in the
second half of the session caught many investors unawares as they were hopeful
of the market retaining gains and even hitting the upper end of the circuit
filter.
Brokers said they expect equities to be volatile near term, but
trending higher.
Ace investor Ramesh Damani said he expected the bull run to
continue on the back of increased retail investor participation in the coming
days. “I think we are now perhaps crossing the first stage of a bull market and
moving to a more mature second phase of the bull market,” he said in an
interview to CNBC-TV18. Most experts shared Damani’s views, saying a stable
government at the Centre was likely to change global investor perception about
India.
“This is a very important endorsement of economic reform; an electorate
in India going out and asking for a better growth environment, voting for a
administration that has the reputation at the state level for getting things
done,” said JP Morgan’s Adrian Mowat, adding, “foreign investors are certainly
going to welcome this.” But there were voices of caution as well. “It is
important to be realistic about the pace of political and economic change, at
least in the nearer term,” said brokerage house HSBC in its note to clients.
“The new government will not be able to change things overnight and the
recovery in GDP growth will likely prove protracted, possibly even move
sideways in the near term until we have measurable progress on reforms and
investment projects,” the note added. Among stocks of Gujarat-based companies,
key gainers included Adani Enterpriises, Pipavav Defence, Guj State Petro,
Gujarat Pipavav, and GNFC, up between 3-6 percent.
