June 3rd 2024.
On Monday, the stock market in Mumbai experienced a surge as the benchmark indices Sensex and Nifty rose by more than 3%. This was due to widespread buying by investors, in anticipation of a huge victory for the BJP-led NDA in the general elections according to exit polls.
The Sensex, which is comprised of 30 major companies, jumped by a whopping 3.39% or 2,507.47 points, closing at a record high of 76,468.78. This marked the biggest single-day gain for the stock market in three years. Additionally, it also reached an all-time high of 76,738.89 during the day, with an increase of 3.75%. Similarly, the Nifty also saw a significant rise of 3.25%, or 733.20 points, closing at 23,263.90. It hit an intra-day high of 23,338.70, rising by 3.58%.
The market was largely driven by the rise in blue-chip stocks such as Reliance Industries, ICICI Bank, HDFC Bank, and State Bank of India. The positive sentiment was further boosted by the release of strong GDP data. Furthermore, all companies under the Adani Group saw a sharp surge in their stocks, with Adani Power rising by 16%.
In terms of sectors, the Public Sector Undertakings (PSUs), Power, Utilities, Oil, Energy, Capital Goods, and Realty industries saw an increase of up to 8%. This was a clear indication of the positive outlook towards the stock market.
The exit polls on Saturday predicted a third consecutive term for Prime Minister Narendra Modi and a big majority for the BJP-led NDA in the Lok Sabha polls. This news further bolstered the market, with the counting of votes set to take place on June 4th.
According to Paras Matalia, the Fund Manager and Head of Equity Research at SAMCO Mutual Fund, the market opened at a record high due to the predictions of a landslide victory for the NDA. This also brings the expectation of policy continuity and a stronger government with more seats.
Among the 30-Sensex companies, NTPC, State Bank of India, and Power Grid were the top gainers, with an increase of over 9%. Other major companies that saw a surge in their stocks include Larsen & Toubro, Axis Bank, UltraTech Cement, and Tata Steel.
Meanwhile, companies like Sun Pharma, HCL Technologies, Asian Paints, Nestle, and Infosys saw a decline in their stocks. However, overall, the market sentiment was positive and optimistic.
Vinod Nair, the Head of Research at Geojit Financial Services, stated that the exit polls have activated the optimism for a huge victory for the current government. This has led to a surge in the stocks of PSUs, as there is an expectation for continued reform and progress under their leadership.
In addition to the positive market sentiment, India's economy also grew by 8.2% in the last fiscal year, solidifying its position as the fastest-growing major economy in the world. This news further added to the positive outlook for the stock market.
In other global markets, Seoul, Tokyo, and Hong Kong ended with gains, while Shanghai saw a decline. European markets were trading in positive territory, and the US markets ended mostly higher on Friday.
According to exchange data, Foreign Institutional Investors bought equities worth Rs 1,613.24 crore on Friday. The global oil benchmark Brent crude also saw a slight increase of 0.18%, settling at USD 81.26 a barrel.
In the previous week, the BSE benchmark saw a slight increase of 0.10%, closing at 73,961.31, while the Nifty advanced by 0.19%, ending at 22,530.70. Overall, the stock market in Mumbai is experiencing a positive and optimistic trend, driven by various factors such as the exit polls, strong GDP data, and growth in major companies.
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