Sensex jumps over 450 points, rupee rises on hopes of BJP victory

Stock markets rise over 2%, while rupee strengthens to 61.75 per dollar 

 

Thu, Dec 05 2013

The BSE Bankex led the gains for the Sensex with a 4.1% rise, followed by the Capital Goods index which gained 2.8%. Photo: Bloomberg

Mumbai: Indian shares shunned the weakness in their regional peers and climbed more than 2% on Thursday morning, while rupee strengthened against dollar to trade at 61 levels after exit polls indicated the main opposition Bhartiya Janata Party (BJP) was set to win four of five state elections to give it momentum ahead of national voting next year.

At 10.50am, the 30-share benchmark BSE Sensex was trading 1.78%, or 369.54 points, higher at 21,078.25, while the National Stock Exchange’s (NSE’s) broader 50-share Nifty was trading up 1.89%, or 116.20 points, at 6,277.15. All stocks on the Sensex and Nifty were trading in green.

Earlier in the day, the Sensex had risen as much as 2.21%, or 456.89 points, to 21,165.60, while the Nifty had gained as much as 2.27%, or 139.60 points, to 6,300.55.

Taking cues from the strong stock market movement, the Indian rupee also opened stronger at 61.755 per dollar compared with Wednesday’s close of 62.055.

If exit polls are proven correct, the outcome would point to a critical trend less than six months before the general election. Late on Wednesday, several exit polls projected that the BJP would score an outright win in Rajasthan and Madhya Pradesh and hold the edge in a close finish in Delhi and Chhattisgarh.

Significantly, the exit polls also project a spectacular debut for the Aam Aadmi Party (AAP) in Delhi, where the election was held on Wednesday.

“The market seems to have factored the positive results, and if there are bigger surprises in store like the BJP winning more seats than expected in Delhi, market could see a major boost next week,” said Deven Choksey, chief executive officer and managing director, KR Choksey Shares and Securities Pvt. Ltd.

He added that these election results could give a prelude as to what 2014 general elections could end up like.

“The market wants the growth path to return. (Narendra) Modi has been very proactive about industrial growth and progress in Gujarat, and investors are hoping they see him at the Centre,” he said pointing to the rise in banking and capital goods indices.

The BSE Bankex led the gains for the Sensex with a 4.1% rise, followed by the Capital Goods index which gained 2.8%.

Leading private lenders ICICI bank Ltd and HDFC Bank Ltd were up 6% and 4.1%, respectively. Bharat Heavy Electricals Ltd (BHEL) rose 3.2%.

The yield on India’s 10-year benchmark bond was trading at 8.765%, compared with its Tuesday’s close of 8.779%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.620, unchanged from its previous close of 80.619.

Ravindra Sonavane contributed to this story.

ABHISHEK KUMAR

PGDM 1ST YR