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Sensex gains 1% to record high after exit polls back Narendra Modi as PM

LiveMint logoLiveMint 13-05-2014 Ashwin Ramarathinam

Mumbai: India’s benchmark equity indices scaled fresh record high on Tuesday, as the exit poll results on Monday pointed that Narendra Modi is set to become the country’s next prime minister, with Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) forecast to sweep to a parliamentary majority in the world’s biggest-ever election.

At 9.45am, the 30-share bellwether BSE Sensex was trading 1.14% higher at 23,820 points, while the National Stock Exchange’s (NSE’s) broader 50-share Nifty was trading up 1.1% at 7,091 points.

All the 30 Sensex stocks were trading in the green, with Oil and Natural Gas Corp. Ltd (ONGC), Bharat Heavy Electricals Ltd (Bhel) and NTPC Ltd being the top gainers.

NTPC shares gained 5.11% to `127.5 apiece, ONGC gained 4.53% to `345.65, while Bhel gained 2.85% to `204.10.

Among the Sensex stocks, Maruti Suzuki India Ltd and Hero MotoCorp Ltd hit all-time highs on open. At 9:16am, Maruti was trading up 0.62% at `2,080, while Hero was up 0.89% to `2,324.95 per share.

The oil and gas and power indices were the top sectoral gainers, up 2.29% and 1.82%, respectively.

Foreign institutional investors (FIIs) have pumped in a net $1 billion in 14 straight sessions ending 9 May, latest data from the Securities and Exchange Board of India (Sebi) showed.

“We expect further 5-10% gains in the market in the whole week,” said Rakesh Arora at Macquarie Capital Securities (India) Pvt. Ltd, in response to the findings of exit polls released on Monday. “Exit polls are not always accurate, they need to be taken with a pinch of salt. So it remains to be seen if it translates in final results,” he added.

In a note issued after exit poll results on Monday, UBS analysts Gautam Chhaochharia and Sanjena Dadawala said a positive election outcome was probably not yet be priced in, and indicative levels for Nifty in this euphoric scenario, taking in 15% earnings growth expectations for fiscal year 2015, would be near 7,800-level.

“In our view, a more euphoric sentiment among investors (NDA near or more than 272) would likely imply higher multiples, though sustainability would depend on actual delivery in policymaking hopes,” UBS said in the note.

Among stock-specific gainers, Mangalore Chemicals and Fertilizers Ltd gained 3.4% to `72.85 after Zuari Fertilisers and Chemicals Ltd made a counter open offer of `68.55 per share.

Shares in Bharti Airtel Ltd gained 1.05% to `321 apiece after the telecom company raised $1 billion in dollar bonds and €750 million via a euro bond issue.

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