Mumbai, May 15: Stock markets today continued to be confident that a stable government led by Narendra Modi would come to power at the Centre.
The optimism puts key indices close to their record highs with the 30-share BSE Sensex finishing at a new closing peak of 23905.60 — a gain of 90.48 points on late buying.
Market analysts point out that while investors are keenly looking forward to the counting day, stock prices can show a huge movement either way depending on whether expectations are met or not.
The indices could see strong gains in the event of the NDA crossing the 300- mark. However, analysts warn, there could be a massive correction if the results indicated a fractured mandate and the seats of the NDA fell below the 220-mark.
Though the exit polls have shown that the NDA is likely to get a majority, investors are cautious as these projections have gone wrong in the past.
“We have already factored in an NDA government. If the alliance secures numbers that are in line with what the stock markets have already been expecting, do not expect a huge jump in share prices,’’ an analyst said.
To ring-fence the capital market from possible manipulations tomorrow, Sebi as well as the bourses and other market entities have prepared an elaborate vigil mechanism.
While market authorities have been monitoring stock movements very closely over the last few days, they are now mainly focussing on tackling any possible shocks tomorrow and on Monday.
“We want to assure investors that we are prepared for any eventuality and if anyone indulges in any irregularity in the market, we are fully prepared for that,” Sebi chairman U.K. Sinha told reporters.
A special Sebi team is keeping a close tab on the stock market movements, while another team will monitor the election results to understand whether price movements are linked to outcomes in various constituencies, sources said.
“We assured the board that we are in discussions with the finance ministry and Sebi. We have placed prudential contingency plans to infuse liquidity, if needed. We hope that everything will go normally tomorrow when the election results are announced,” governor Raghuram Rajan said after a meeting of the RBI’s board.
Today’s gain in the markets came after the benchmark indices took a breather on Wednesday, after gaining almost 1500 points in the earlier sessions.
Dealers added that a drop in April wholesale inflation also provided some relief to investors today.
The BSE 30-share Sensex resumed on a stable note at 23809.42 and touched a high of 23971.78, a gain of almost 157 points. However, it soon fell to a low of 23742.75. Buying towards the last 30 minutes of trade saw the index finishing at a new closing peak of 23905.60. Similarly, the 50-share Nifty of the NSE also ended at a new closing high of 7123.15.
Provisional data from the bourses showed that FIIs bought stocks worth Rs 935 crore in trading today. Major gainers in today’s trade included Tata Power (3.07 per cent), NTPC (2.95 per cent), ONGC (2.56 per cent) and Sun Pharma.