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Custodians on alert as stocks rock

Mumbai/New Delhi, May 13: The bull charge on bourses continued unabated even as finance minister P. Chidambaram asked regulators, including Sebi and the RBI, to remain alert and take necessary action to curb excessive volatility.

Buoyed by the exit polls, the BSE Sensex today breached the 24000-mark in intra-day trade to touch a new peak of 24068.94, while the Nifty hit 7172.35.

The 30-share index has now gained over 1500 points in the last three trading sessions.

Chidambaram today held a meeting with RBI governor Raghuram Rajan and Sebi chairman U.K. Sinha where the market volatility was discussed.

Responding to the government worry over the sudden surge in stocks, Sinha said regulations were in place to curb any excessive volatility and the regulator was keeping a close watch on stock movements.

Rajan said the RBI was prepared to deal with any kind of eventuality that might occur over the next few days.

Results of exit polls that were released after market hours on Monday showed that the NDA was likely to form the next government at the Centre.

Investors are now expecting a stable government that would bring in pro-business and reform measures.

The exit polls gave the NDA anywhere between 249-290 seats in the Lok Sabha.

“Though the markets had largely discounted the possibility of an NDA government at the Centre, the numbers signalled that we could have a stable government and that drove stocks higher today,” a dealer with a domestic brokerage said.

According to him, the attention of investors is now focused on the results on May 16.

Though exit polls have in the past gone wrong, he said the indices would see a huge rally if the NDA ended up getting close to 300 seats.

The Sensex today opened higher at 23729.78 and the buying momentum continued, taking the 30-share index to an intra-day high of 24068.94.

At the end of the day, the Sensex closed at a new high of 23871.23 with a gain of 320.23 points, or 1.36 per cent, over Monday’s close.

The 50-share Nifty of the National Stock Exchange ended at a new peak of 7108.75, rising 94.50, or 1.35 per cent.

Buying interest was seen in several mid-cap and small cap stocks. Both these indices rose 1.44 per cent and 1.71 per cent, respectively.