Equity benchmarks scripted a strong rally to close firm on Friday ahead of the formation of the new government on Monday. BJP leader Narendra Modi will be sworn in as Prime Minister on Monday followed by the swearing in of his new Cabinet.

The benchmark BSE Sensex closed at 24,693, up 319 points or 1.31 per cent. The Nifty settled at the 7,367 mark, up 91 points or 1.25 per cent.

On the BSE, except for FMCG and consumer durables, all sectoral indices closed in the green, led by the power and oil and gas sectors. On Friday, as many as 345 stocks hit the upper circuit on the BSE as against just 57 stocks, which touched the lower circuit.

“The markets remained in the positive zone on the back of buying seen in banking, capital goods, power and realty stocks. SBI came out with a good set of numbers, which was well above Street expectations and lifted overall sentiment,” said Alex Mathews, Head, Research, Geojit BNP Paribas Financial Services. There was less volatility and the volatility index stood at 17.76, down around 0.40 per cent.

SBI, Tata Power, Jindal Steel, IDFC and Maruti were the top five Nifty gainers. Kotak Bank, HDFC, Hindalco, ITC and Infosys were the top laggards.

Stocks such as Maruti Suzuki, P&G, Can Fin Homes, Deepak Nitrite, J Kumar Infraprojects, National Buildings Construction Corporation and Shriram City Union Finance hit highs.

Meanwhile, a Reuters report said that the BSE Sensex is now the best performing equity index in the Asia-Pacific for 2014, rising 23.7 per cent in dollar terms, followed by the Jakarta Composite's 22.7 per cent.

On both price-to-book and price-to-earning multiples, Indian valuations do not appear stretched, it added.

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