Sensex ends higher as BJP leads in Gujarat, Himachal poll results

As Prime Minister Narendra Modi-led BJP appeared to win elections in Gujarat and Himachal Pradesh, key Indian equity indices provisionally closed in the green on Monday after witnessing extreme negative to the positive.

The BSE Sensex rose 0.41 percent to 33,601.68, while the broader NSE Nifty ended 0.54 percent higher at 10,388.75. Both indexes were led by gains in financial stocks.

The Sensex touched a high of 33,801.90 points and a low of 32,595.63 points during the intra-day trade so far. The market breadth was bullish -- 1,472 advances and 1,182 declines.

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. 

"Markets ended higher on Monday after a very weak opening. The Nifty bounced back sharply as the news came out that the BJP won for a sixth straight term in Gujarat and will replace Congress rule to form government in Himachal Pradesh," Deepak Jasani, Head, Retail Research, HDFC Securities, told IANS.

Jasani further said, "Positive cues from global markets also boosted the market sentiments. Sectorally, the top gainers were the PSU banks, metal, pharma and auto indices, while the top loser was the realty index." 

On the currency front, the Indian rupee weakened by 20 paise to close at 64.24 against the US dollar from its previous close at 64.04.

"Overall it was a very exciting trading session. Going forward, outlook remains to be positive with focus on housing, cement, infrastructure and metal stocks," said Anita Gandhi, Whole Time Director, Arihant Capital Markets.

"The structural bull market sentiment will continue, however some yearend profit taking by FIIs (foreign institutional investors) cannot be ruled out," Gandhi added.

Vinod Nair, Head of Research, Geojit Financial Services, told IANS, "Market recovered from the initial disruption after a clear victory for government in Gujarat and Himachal Pradesh state election. Triggers like earnings season and global market movement will be closely watched for any earnings upgrade and US tax reform for the direction."

Major Sensex gainers on Monday were: Mahindra and Mahindra, up 2.71 per cent at Rs 1,522.85; Sun Pharma, up 2.06 per cent at Rs 528.85; State Bank of India, up 1.97 per cent at Rs 318.90; Wipro, up 1.90 per cent at Rs 295.30; and ICICI Bank, up 1.78 per cent at Rs 308.85.

Major Sensex losers were: Yes Bank, down 1.23 per cent at Rs 312.15; Coal India, down 1.11 per cent at Rs 268.05; Infosys, down 0.79 per cent at Rs 1,015.35; ITC, down 0.62 per cent at Rs 263.10; and Kotak Bank, down 0.53 per cent at Rs 1,023.55.

According to Election Commission results and trends available for the 182 seats in Gujarat, the BJP won 17 and was ahead in 84. It needs 93 to form a majority government. 

The main opposition Congress party managed to win 15 and was leading in 61 seats.

In early trading, the indexes dropped as much as 2.5 percent each as initial counting showed a close fight between the ruling Bharatiya Janata Party and the Congress party. 

Reacting to election results in Gujarat and Himachal Pradesh, Prime Minister Narendra Modi said today that it indicates a strong support for politics of good governance and development. 

In a series of tweets, the Prime Minister said, "I bow to the people of Gujarat and Himachal Pradesh for their affection and trust in BJP. I assure them that we will leave no stone unturned in furthering the development journey of these states and serve the people tirelessly."

BJP chief Amit Shah, however, said the party's victory in the Gujarat and Himachal Pradesh assembly polls is the win of Prime Minister Narendra Modi's development agenda against the politics of casteism and appeasement.

(With Agency Inputs)