Market benchmarks continued to scale new records on Tuesday on the back of exit polls showing that BJP led NDA would form the next government.

The Sensex crossed the 24,000 mark in intra-day trade to close at a third consecutive new high of 23,871, up 320 points or 1 per cent . The Nifty too hit a new intra-day high of 7,172.35 to end the day at a fresh record of 7,109 after zooming up by 95 points or 1 per cent.

The exit polls on Monday night showed between 249 to 290 seats to the Narendra Modi-led alliance which is close to the half-way mark in the 543-member Lok Sabha.

Alex Mathews, Head Research, Geojit BNP Paribas Financial Services said: “The markets tested a record high on investor optimism of a stable government despite poor macro data on inflation and IIP. The global cues also remained supportive.”

“On the back of rise in the food prices, the CPI rose to three month high at 8.59 per cent against 8.31 per cent in the previous month. Also the factory production data remained in the negative territory for the second month in a row on the back of decline in the manufacturing output,” he added.

On the BSE, except healthcare all sectoral indices closed in the green with power, consumer durables and oil and gas sectors leading the rally after coming into investor limelight.

Dipen Shah, Head- Private Client Group Research, Kotak Securities: “The new government’s intent and announcements pertaining to fiscal and investment reforms will be critical for the sentiment of the markets to be sustained, in the short term. We do believe that, the FY15 growth rates will likely improve only modestly and strong growth can be expected to return in FY16 and beyond.”

Volatility was down in the markets with the India Vix index closing at 32, down 13.6 per cent.

BHEL, Heromotocorp, Ambuja Cements, Bank of Baroda and DLF were the top five Nifty gainers while PNB, Dr Reddy, Cairn, Hindalco and HDFC were the top laggards.

(This article was published on May 13, 2014)
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