Equity markets continue to run on steroids on exit polls showing BJP-led majority

Indian equity markets after scaling record high level in early deals, continues to run on steroids on exit polls projections of Hindu nationalist Narendra Modi becoming India's next prime minister, with his opposition party the Bharatiya Janata Party (BJP) and its allies sweeping a parliamentary majority in the world's biggest-ever election. Largely unscathed by dismal set of macro-economic data, both Sensex and Nifty are trading above the psychological 24,000 and 7,150 levels respectively, with massive gains of close to 2%. Meanwhile, broader indices too equally participating into the rally are up with gains of over 1.5%.

Domestic macro-economic data of Retail Inflation surging to three month high and Industrial output activity shrink for sixth time in a year, failed to cast any shadow over the euphoria of market-participants. Additionally, global cues too were supportive, with Asian pacific shares trading mostly higher and European counterparts too making a positive start.

Amidst across the board buying activity, no sectoral indices were trading down into negative territory, but the notable gainers were stocks from Power, Capital Goods and Consumer Durables counters. Besides, even Oil marketing companies lured investors’ attention after the diesel prices were hiked by Rs 1.02 per litre. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1557:987; while 121 shares remained unchanged.

The BSE Sensex is currently trading at 24015.57, up by 464.57 points or 1.97% after trading in a range of 24068.94 and 23729.25. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.82%, while Small cap index up by 1.71%.

Amidst broad-based, while there were no losers on BSE, the gaining sectoral indices on the BSE were Power up by 4.49%, Capital Goods up by 4.02%, Consumer Durables up by 3.89%, PSU up by 3.60% and Realty up by 2.79%

The top gainers on the Sensex were BHEL up by 13.40%, Tata Steel up by 4.69%, NTPC up by 4.33%, Gail India up by 4.06% and ONGC up by 3.86%. On the flip side, Dr Reddy’s Lab down by 1.97% and HDFC Bank down by 0.59% were the only losers on the index.

Meanwhile, the government, immediately after the conclusion of five week long elections has hiked the diesel prices by Rs 1.09 a litre, excluding state levies. With the hike coming into effect from Tuesday, diesel in Delhi will now cost Rs 56.71 (inclusive of tax); in Kolkata will cost Rs 61.38, a hike of Rs 1.27 from the previous Rs 60.11. While, in Mumbai, post the hike, diesel would be expensive by Rs 1.35 at Rs 65.21 compared to the previous Rs 63.86, and in Chennai will be up by Rs 1.32 at Rs 60.50 from the previous price of Rs 59.18.This development comes after a brief hiatus as the monthly hike in diesel prices were put on hold just before India began voting to elect a new government. State-owned oil companies had last hiked diesel price on March 1.

Previously diesel prices had risen by a cumulative Rs 8.33 a litre in 14 installments since January 2013. This is part of government’s plan to raise diesel prices by 40-50 paise a litre every month until losses on the fuel are wiped out. However, oil firms skipped the hikes due on April 1 and May 1 as UPA did not want to take unpopular decision during election season.

The oil marketing companies (OMCs) were asked to drop the plan of rate hike on the argument that revenue losses on the fuel have dropped below Rs 6 a litre, which could be easily compensated by the government. Ironically, while the government is yet to accept the Parikh panel’s recommendations, the Oil Ministry had at the time of shelving the April hike claimed that an expert committee headed by Kirit Parikh recommended that government provide a fixed subsidy of Rs 6 per litre on diesel and hence was no need to raise rates, if the revenue losses were below this threshold limit. However, the rates hikes were delayed for yet another month even after losses surpassed the Rs 6 a litre threshold. Though, despite the hikes OMCs will continue losing Rs 5.71 on sale of diesel per litre.

The CNX Nifty is currently trading at 7,159.00, up by 144.75 points or 2.06% after trading in a range of 7,172.35 and 7,067.15. There were 48 stocks advancing against 2 declining on the index.

The top gainers of the Nifty were BHEL up by 13.62%, Bank of Baroda up by 7.25%, DLF up by 4.82%, Tata Steel up by 4.69% and NTPC up by 4.42%. On the flip side, Dr Reddy’s Lab down by 2.05% and HDFC Bank down by 0.43% were the only losers on the index.

Asian equity indices were trading in green; Hang Seng up by 0.33%, Taiwan Weighted up by 0.11%, Nikkei 225 surged 1.95% and Jakarta Composite added 0.16%. While, Shanghai Composite down by 0.332% were the only losers on the index.