BSE sensex joins election rally, hits a new high

Mar 08 2014, 10:47 IST
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BSE sensex nears 22,000 as opinion polls give NDA 211-231 seats. Reuters BSE sensex nears 22,000 as opinion polls give NDA 211-231 seats. Reuters
SummaryBSE sensex nears 22,000 as opinion polls give NDA 211-231 seats.

With opinion polls indicating a strong showing by the NDA, the benchmark indices touched new highs backed by improving macroeconomic data and a stronger belief that India will have a stable and an efficient government. Positive global cues further and easing of East-West tensions over Ukraine further aided investor sentiment for Indian markets.

Foreign institutional investors (FIIs), who have been betting heavily on the BJP’s Narendra Modi to lead the next government at the Centre, continued with their buying spree for the 17th consecutive session on hopes.

FIIs net bought nearly $422 million of Indian shares in the cash segment — the biggest single-day purchase since December 9, showed provisional data from stock exchanges. In the last 17 sessions, FIIs buying has crossed $1.5 billion.

As per the latest national poll projection by CSDS on Thursday, the BJP-led National Democratic Alliance (NDA) will win 211-231 seats in the Lok Sabha election while the Congress-led UPA would end up with 107-127 seats.

Gaining for the fourth consecutive session on Friday, the Sensex surged 1.89% (405.92 points) — the biggest single-day move in more than three months.

The 30-share gauge neared the 22,000 mark in late afternoon trade, and eventually settled at 21,919.79. The Nifty crossed the crucial psychological level of 6,500. The index of top 50 stocks on the NSE closed at 6,526.65, up 125.50 points or 1.96%.

“Optimism of shrinking current account deficit is likely to boost the rupee and prompt foreign investors’ investments further... Nifty has achieved our target of 6,400. Positive momentum is likely to continue,” said Sirshendu Basu, chief

investment strategist, Standard Chartered Index heavyweight Reliance Industries gained 5.7%, the biggest daily increase in over five years. On Thursday, US equities touched another high as jobless claims data declined to a three-month low. Data showed the number of people seeking unemployment benefits dropped by 26,000 last week, to a seasonally adjusted 323,000 as layoffs remain at pre-recession levels.

“The positive trend is very much intact until Nifty holds 6,200 levels and any dip can be considered as a good buying opportunity,” said Dhananjay Sinha, head, institutional equities, Emkay Global Financial Services.

Cash turnover on the BSE and NSE on Friday touched Rs 22,559 crore, the highest in more than a year, Bloomberg data showed. Stock exchanges clocked a combined turnover of Rs 25,551 crore on February 28 last year.

Market breadth was strong with 22 out of 30 Sensex companies moving up. Nine

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