Sensex closes 138 points up, Nifty below 10,400 as BJP set to win Gujarat, Himachal
The Sensex tanked as much as 867 points while the NSE Nifty plunged 258 points in the opening session, but later recovered as the trends in the Gujarat election results turned in favour of the BJP.business Updated: Dec 18, 2017 15:54 IST
The BSE Sensex and the NSE Nifty turned positive after falling over 2% in the opening trade on Monday as final voting trends showed a close fight between the Bharatiya Janata Party (BJP) and the Congress in both Gujarat and Himachal Pradesh. The rupee recovered from early losses, but was still trading marginally lower against the US dollar, while bond yield hit a fresh 16-month high.
BSE Sensex closed higher by 138.71 points, or 0.41%, to 33,601.68, while the Nifty 50 rose 55.50 points, or 0.54%, to close at 10,388.75.
All the sectoral indices on BSE, except realty and energy, ended higher led by metal, which was up 1.83%, and auto 1.21%. On NSE, the Nifty PSU Banks rallied 2.38%.
Earlier, markets tumbled over 2%, the worst drop in a year, after early trends showed a close fight between the Bharatiya Janata Party (BJP) and the Congress in the Gujarat assembly elections.
In early trade, the Sensex declined 2.6% or 867.34 points at 32,595.63, while the 50-share Nifty index was at 10,074.80, down 2.5%.
At 10:15am, the Sensex was at 33,601.29, up 138.32 points while the Nifty was at 10,386.25 or 53 points. All the 19 sectoral indices declined. BSE Telecom Index fell over 3.3% followed by BSE Basic Materials and Metals, which were down 2.5% each. BSE Bankex fell 2.4%.
“A (BJP) victory will be welcomed by markets and a defeat will lead to a downward knee-jerk reaction. In either case, fundamentals will take over quickly and valuations of individual companies will play the dominant part in share pricing,” said Jayant Manglik, President Retail Sales, Religare Securities Ltd, said
Emkay Global Financial Services Ltd said volatility is expected in the coming session because the Gujarat election results would be seen as a precursor for the 2019 Lok Sabha elections. e bull move can continue,” the brokerage firm said.
According to analysts, post-elections, the markets will shift focus to the Budget. “Considering that the upcoming Budget will be the last full Budget by the NDA before the 2019 General Elections, there will be every temptation for the government to try and appease the voters, but within the permissible limits.We believe that while there could be feel-good announcements, the exercise in general would be a fine balancing act,” said Manglik added.