Benchmark stock market gained sharply during Monday’s intraday trading session, with the Sensex and Nifty registering fresh record highs.
The S&P BSE Sensex crossed 76,000 mark for the first time, rising well over 500 points. The Nifty50 also registered a fresh record high of 23,110.80.
At around 1:26 pm, the Sensex was up 495.85 points at 75,906.24, while the Nifty50 rose 126.45 points to 23,083.55.
Even the broader market indices gained sharply despite the prevailing volatility on Dalal Street.
Today’s rally on Dalal Street has been supported by strong gains in banking, financial services and IT stocks.
The top five gainers on Nifty50 were Divi’s Laboratories, IndusInd Bank, Bajaj Finance, Adani Ports and Axis Bank. On the other hand, the top losers are Wipro, Grasim, ONGC, Adani Enterprises and Eicher Motors.
What’s behind the stock market rally?
Despite facing high volatility and subsequent profit booking, the stock markets have recently seen a surge in optimism, largely driven by predictions that the BJP-led NDA will return to power for a third term.
Most brokerages suggest a strong likelihood of the BJP’s comeback. UBS, for instance, anticipates that the BJP will emerge as the single-largest party following the Lok Sabha election results set to be announced on June 4.
If this scenario unfolds, markets are expected to remain confident about policy continuity, with potential for further reforms such as disinvestment, the land bill, and the uniform civil code, depending on the number of seats the BJP secures.
“Overall, we believe the financial market sentiment will likely remain positive,” UBS said.
Such predictions by brokerage firms have bolstered investor confidence, contributing to the recent rally in the stock markets.
However, brokerages have also highlighted that a shock outcome could lead to a near-term slide on Dalal Street. Ace investors and author Ruchir Sharma recently said that the markets may lose 10-20% “in a flash” if BJP secures less than 250 seats.