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Sensex closes at all-time high after poll results

business Updated: Dec 09, 2013 16:31 IST
HT Correspondent
HT Correspondent
Hindustan Times

Going past two previous highs, the benchmark BSE Sensex on Monday rose 330 points to end at a record high of 21,326 after hitting an all all-time intraday high of 21,484.

India's equity and currency markets gave a rousing response to the assembly election results with 30-share benchmark BSE Sensex vaulting to a record high of 21,484 points, surpassing its previous all-time peak of 21,239 scaled on November 3.

The Indian rupee opened at 60.83 levels after closing at 61.41 levels on Friday.

The overall sentiment played a crucial role last week where a strong showing by the BJP in the recently concluded assembly elections helped rupee to gain momentum, experts said.

The Bharatiya Janata Party (BJP), which returned with an absolute majority in three states — Madhya Pradesh, Rajasthan and Chhattisgarh — and the single largest party in Delhi, is seen by investors as a pro-reforms political party.

The assembly poll results on Sunday has triggered hopes that stable governments in key states could be a precursor of a steady regime in the Centre after the 2014 Lok Sabha elections that will hasten decision making and fast-track reforms initiatives.

Market participants believe that a stable regime at the Centre that enjoys a comfortable majority will allow the government to focus more on reforms, vital to spin jobs and multiply income, rather than on political risk management and appeasing a restive alliance.

Global investment banks and brokerage houses have said that a BJP victory during the Lok Sabha elections could lead to a strong market rally.

Japanese brokerage and research firm Nomura and US investment banking major Goldman Sachs have both come out with reports saying a stable Narendra Modi-led BJP government could boost investor sentiments.

Credit rating agency, Moody's in a note last week had said that “Although there have been policy efforts to induce investment in the last year, their impact may not be evident in the near term. The outcome of national elections next year could affect growth, depending on how it impacts sentiment and policies,” Moody’s said.

In a recent report another ratings agency Standard and Poor’s (S&P) had placed the onus squarely on the next government to turnaround the economy, underlining the importance of speedier decision making and push ahead with reforms.