The Indian stock market witnessed a strong rally for the second consecutive day as benchmark equity indices Sensex and Nifty surged following the unanimous election of Narendra Modi as the leader of the BJP-led National Democratic Alliance (NDA).
The 30-share BSE Sensex soared by 696.46 points to reach 75,078.70 in early trade, while the NSE Nifty climbed 179.15 points to 22,799.50. NTPC, State Bank of India, Power Grid, Tata Steel, Tech Mahindra, and HCL Technologies emerged as the top gainers among the Sensex companies, while Hindustan Unilever, Nestle, Sun Pharma, and Asian Paints lagged behind.
With Modi set to take charge as the Prime Minister for a historic third consecutive term after the NDA secured 293 seats in the Lok Sabha polls, the market sentiment remained positive. In Asian markets, Tokyo and Hong Kong traded with gains, while Shanghai quoted lower. The US markets also ended on a positive note on Wednesday.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the global construct turning favorable with the possibility of rate cuts by the Fed. However, FIIs continued to sell on high valuations in India compared to the cheaper valuations of Chinese stocks.
Despite the political stability in the near term, Vijayakumar cautioned that political developments could still impact the markets. The global oil benchmark Brent crude also saw an increase to USD 78.71 a barrel, while FIIs offloaded equities worth Rs 5,656.26 crore on Wednesday.
After bouncing back from Tuesday’s downfall, the BSE Sensex surged by 2,303.19 points to settle at 74,382.24, while the Nifty climbed 735.85 points to 22,620.35. The market is expected to continue reacting to political and global economic developments in the coming days.