Benchmark indices 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. Realty, capital goods, banks, power and oil & gas shares were the best performers, 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. Sesa Sterlite (+11 percent), PNB (+7 percent), BPCL (+7 percent), BHEL and DLF (6 percent each) were the star performers of the day.
Tata Steel topped the list of losers, falling 4 percent as the company sources a big chunk of its iron ore requirements from Odisha. Other big losers in the Nifty included, ITC, Dr Reddy’s, Infosys and HCL Tech, shedding around 3 percent each. 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.
Tata Steel topped the list of losers, falling 4 percent as the company sources a big chunk of its iron ore requirements from Odisha. Other big losers in the Nifty included, ITC, Dr Reddy’s, Infosys and HCL Tech, shedding around 3 percent each. 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.
