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Stocks soar on stability hope

Mumbai, May 9: Hopes of a stable government at the Centre triggered a buying spree on the bourses today, with the BSE benchmark Sensex zooming over 650 points to breach the crucial 23000-mark for the first time.

Frenzied buying was seen across sectors, mainly in banking, realty, power, refinery and capital goods.

Both the Sensex and the Nifty hit a record high on Friday, posting their biggest daily gains since September on hopes that the Bharatiya Janata Party would win a majority in elections ending next week, sending blue-chips such as ICICI Bank sharply higher.

The BJP is seen by markets as being more investor-and business-friendly. The five-week-long elections end on Monday and exit polls will be available after the last votes are cast. Actual results will be declared on May 16.

Opinion polls conducted before the elections have consistently shown the BJP and its prime ministerial candidate Narendra Modi ahead.

“There was a rumour in the markets that exit polls by a TV channel show the NDA securing around 260 seats. This led to brisk buying on hopes of a stable government at the Centre,’’ a broker said.

The indices began on a quiet note but the sentiment changed soon after. Most investors were expecting the NDA to secure 220 seats. “The number that is now doing the rounds is 250-260 and this brought back the buying momentum,’’ the broker said.

Riding on foreign fund inflows, the Sensex hit a new high of 23048.49. However, it settled the day a few notches lower at 22994.23 — a record closing high and a rise of 650.19 points, or 2.91 per cent, over Thursday’s close.

On September 19 last year, the market barometer had soared over 684 points. The previous all-time high record for the Sensex was 22939.31 on April 25.

The Nifty today set a historic high of 6871.35 but ended the day at 6858.80, a gain of 198.95 points, or 2.99 per cent.

In a television interview on Thursday night, Modi exuded confidence that the BJP would form the “strongest and the most stable government” since Rajiv Gandhi’s government in 1984.

“Unmistakably, the focus remains on May 16, when the election verdict would be announced. But even before that, the market would react to exit polls numbers,” said Sanjeev Zarbade of Kotak Securities.

Sectors seen most likely to benefit from a Modi win led the gains today. Infrastructure shares such as Ambuja Cement surged 7.4 per cent. The NSE banking sub-index gained 5.5 per cent. ICICI Bank surged 6.95 per cent, while the SBI rose 3.9 per cent. RIL gained 3.5 per cent, while ONGC surged 3.2 per cent.

 
 
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