Markets hit fresh record highs on state election result boost

Mumbai: Equity benchmark indices maintained their winning streak for the fifth straight session on Monday as investors, already buoyed by the strong macroeconomic data, responded positively to BJP's victory in three assembly polls.

BJP's clear majority in Madhya Pradesh, Rajasthan and Chhattisgarh state elections further fuelled the positive sentiment built up last week on the back of robust macroeconomic numbers and unabated foreign fund inflows, analysts said.

Crude oil prices hovering below $80 per barrel also boosted investors sentiment, they said.

The 30-share BSE Sensex jumped 877.43 points, or 1.30 per cent, to a new peak of 68,358.62 in early trade. The Nifty also climbed 284.80 points, or 1.41 per cent to hit its all-time high of 20,552.70.

Among the Sensex firms, Adani Enterprises and Adani Ports led the index with the maximum gains of 6.79 per cent and 4.52 per cent respectively. Other major gainers were SBI, ICICI Bank, Bharti Airtel, NTPC and Larsen & Toubro.

On the other hand Maruti and Britannia and Dr Reddy's Laboratories defied the trend and traded in negative.

Foreign institutional investors purchased shares worth Rs 1,589.61 crore on Friday, according to exchange data.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: "Market likes political stability and a reform-oriented, market-friendly government. From the market perspective, the results were better-than-expected. The market has already partly discounted a BJP victory with a 500 point rally during the last 4 sessions. But the mood is so exuberant that the rally will continue."

He said the global backdrop is also favourable with the US 10-year bond yield declining to 4.23 per cent.

However, a "restraining factor will be the valuations which are high and will get stretched further with the rally gaining momentum. In the near-term the market will ignore fundamentals and move up but soon high valuations will trigger some selling", Vijayakumar added.

In Asian markets, Shanghai Composite and Hang Seng were trading lower while Nikkei 225 was not trading.

European markets finished broadly higher on Friday with Germany's DAX closing 1.12 higher while London's FTSE 100 gaining 1.03 per cent and France's CAC 40 climbing 0.48 per cent.

The US markets ended mostly with gains with S&P 500 registering a gain of 0.59 per cent on Friday.

Global oil benchmark Brent crude declined 0.63 per cent to $78.38 a barrel.

Domestic equity markets are expected to take cues from global trends, trading activity of foreign investors, and RBI's interest rate decision to be announced later this week.

On Friday, the Nifty climbed 134.75 points or 0.67 per cent to settle at an all-time high of 20,267.90.

Last week, the BSE benchmark jumped 1,511.15 points or 2.29 per cent, while the Nifty climbed 473.2 points or 2.39 per cent.

The market capitalisation of listed companies on the NSE has surpassed the $4 trillion (Rs 334.72 trillion) mark for the first time ever on Friday.

The combined market valuation of all listed companies on the BSE also reached the $4 trillion-milestone for the first time ever on Wednesday (November 29).