The Nifty closed at all time high of 9,087 and Sensex surged 1.7% on Tuesday as investors saw Prime Minister Narendra Modi’s landslide victory in Uttar Pradesh as an endorsement of his economic reform agenda.
After opening up, the broader Nifty hit an all-time high of 9,122.75 and the 30-share benchmark Sensex raced towards the 30,000 mark in intraday trade.
The broader NSE Nifty rose as much as 2.1 percent to the record high in the first trading session since the election results were announced, surpassing its previous peak of 9,119.20 hit on March 4, 2015. But the index gave away early gains and closed at 9,087.
The Sensex too soared to reach 29,561.93 in early morning trade as the Bombay Stock Exchange opened after a three-day holiday and for the first time since results of the five-state assembly polls were announced on Saturday. But it closed up 496 points or 1.7% at 29,442.63.
The Sensex had touched an all-time high of 30,024.74 in March 2015.
Modi’s win strengthened his claim to a second term in 2019, and investors are betting it will embolden the ruling Bharatiya Janata Party (BJP) to embark on more reforms including launching the countrywide goods and services tax passage of labour and land acquisition bills.
ICICI Bank led the Sensex chart, gaining 6% after CLSA tagged the private lender as its top buys while HUL and Larsen & Toubro were up 4% each, HDFC 3.7% and Asian Paints 3.5%.
The gains in India were in contrast to other Asian markets which were subdued in anticipation of possible US Federal Reserve rate hike. Europe traded mixed with FTSE-100 in the green while DAX and CAC-40 in the red.
The Fed is scheduled to hold its rate-setting meeting from Tuesday to Wednesday and most investors expect a raise in rates for only the third time since they went to nearly zero during the financial crisis in 2008.
On Tuesday, Asian markets traded mixed with the MSCI’s broadest index of Asia-Pacific shares outside Japan remaining flat in early trade. Japan’s Nikkei closed down 0.1% while Hang Seng and Shanghai were flat but Kospi was 0.8%.
On Monday, Wall Street closed weaker as the Dow Jones Industrial Average ended down 0.1% but Nasdaq was up 0.24% and S&P flat.
The dollar gained on Fed rate hike expectation while euro fell after British Parliament cleared Prime Minister Theresa May’s Brexit plan.
The dollar index against a group of major currencies gained 0.1% with the greenback gaining 0.1% against the yen. The euro was down 0.1% at about $1.065.